Summary
This paper reviews a bulk of the empirical studies on import demand estimates for Japan which findings are mixed and inconclusive. This review article contributes to the literature in at least two ways: 1. provide a detailed review on the papers which have studied the import demand behavior for Japan, and 2. discuss the issues of import demand framework with reference to Japan, in particular, the determinants of demand for imports. This is a survey paper, which reviews the studies that investigated Japan's import demand behavior in aggregate levels, particularly. This paper concludes that the results of Japan's import demand depend on the model specification and the estimation technique. This paper also reviews the issues, which are related to the candidate determinants of aggregate import demand for Japan.
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Extract
The Demand for Imports in Japan: A Review Article
I. INTRODUCTION
This paper reviews a bulk of the empirical studies on import demand estimates for Japan which findings are mixed and inconclusive. Such a survey paper is in line with the Journal of Economic Surveys; for example, a survey article on intertemporal optimizing model of trade and current account balance by Singh (2007). This review article contributes to the literature in at least two ways: (1) provide a detailed review on the papers which have studied the import demand behaviour for Japan, and the documented parameters estimates in Appendix A are useful for macroeconomists in calibrating the dynamic general equilibrium models, particularly for Japan; and (2) discuss the issues of import demand framework with reference to Japan, in particular, the determinants of demand for imports (income variable, price variables, non-traditional determinants for imports, and structural stability).An Import demand model is conceptually like any other demand model (Murray and Ginman, 1976, p.75). Microeconomic theory identifies the relevant parameters of a demand equation derived from maximizing a utility function with respect to income and prices (see Arize and Afifi, 1987, p.605). The income elasticities can be used to determine how imports of changes in Gross Domestic Product (GDP) and the price elasticities are important for assessing the effects on imports of changes in relative prices of imports, tariffs and/or exchange rates (Sawyer and ...See the full content of this document
