Estimation of the aggregate import demand function for Mexico: a cointegration analysis

Purpose This study estimated total import demand elasticities concerning income, prices and domestic prices. A high propensity to constitutes a significant obstacle economic growth in Mexico since the benefits of increased exports or any other aggregate expansion leak rest world. Design/methodology/approach paper Vector Error Correction Model Total imports are dependent variable, while Gross Domestic Product (GDP) independent variables. Findings The principal finding is that an increase 1 peso Mexican GDP leads rise 0.50 pesos imports; elasticity for low. Still, 2.14 times greater than These results have policy implications, such as promoting market national content exports. Research limitations/implications It tempting estimate function entire 1993–2019 period data available. But by doing so, authors would overestimate import, given from 1993 2019, proportion percentage went 11.37 29.66 2019. Therefore, it makes more sense 2000 with stable GDP. Originality/value level developing countries means much their filtered abroad. low impact its on related economy’s imports. calculate this relationship new methods.