Determination of Aggregate Imports Function: Time Series Evidence for Tunisia

The objective of present study is to examine the role of import demand function for Tunisia. We utilize Autoregressive Distributed Lag (ADRL) to bound testing approach to cointegration. The time period include for this purpose starts from 1980 and ends at 2009. The overall results indicate that long run relationship exist among import demand, household consumption and exports in Tunisia. Furthermore, import demand of Tunisia is highly elastic for final consumption of household and exports of Tunisia but it is inelastic in case of investment as well as relative prices in long run. But in short run, import demand reveals that inelastic behavior relative to final consumption of household, domestic investment, exports, and relative prices in Tunisia. Our results provide new insights for policy to reconsider the import demand function in Tunisia.