Conventional specifications of import demand in LDCs have commonly been plagued by implausible and unstable parameter estimates. This paper shows the importance of imposing long-run income homogeneity and of including foreign exchange reserves when estimating import demand function for an LDC....

In this paper we obtain and interpret new estimates of the short- and long-run influence of exchange-rate volatility (or risk) on the import flows of the United States, in the generalized floating exchange-rate period. The major finding is that there is a significant long-run negative effect of...

Theory suggests that inflation variability should affect real money balances, although there is ambiguity about the sign of the effect. Using cointegration and vector-error correction (VEC) modeling techniques, this paper presents new evidence on the effect of inflation variability on the demand...