Priced Separation and Supply-Price Specification of Exports: Evidence from Pakistan

Empirical studies of international trade have concentrated on singleequation models to analyse the demand relationship for imports and exports [Houthakker and Magee (1969). Naqvi et al (1983), Bnhmani-Oskooee (1984,1986)]. These studies have assumed that the imports and exports price elasticities facing any individual country are infinite or at least large. The assumption of infinite supply price elasticity may be acceptable for the world supply of imports to a single country. Export demand and supply functions have been estimated in a simultaneous equation framework by Khan (1974), Goldstein and Khan (1978). Dunlevy (1980), Arize (1986.1988). Balassa et al [1989]. Anwar (1985), and Khan and Saqib (1993)] for both developed and underdeveloped countries.