We propose a candidate solution to the imperfect exchange rate passthrough puzzle: habit persistence at the level of individual goods varieties. Deep habits generate a dynamic import demand function that leads to import price markup adjustments, independently of nominal pricing frictions. Augmenting a standard two-country model with deep habits, we obtain low exchange rate pass-through to impor...

rice comes second after wheat in iran`s food consumption economy. however iran is one of the greatest rice importer countries all over the world because of its rising population and recent growth in gdp. this paper presents an analysis of cointegration test between rice import and it`s economic factors over the period 1990-2011, employing engle-granger model. at first, dickey-fuller test shows ...

rice comes second after wheat in iran`s food consumption economy. however iran is one of the greatest rice importer countries all over the world because of its rising population and recent growth in gdp. this paper presents an analysis of cointegration test between rice import and it`s economic factors over the period 1990-2011, employing engle-granger model. at first, dickey-fuller test shows ...

Assuming preferences to be generated by an aggregate utility function, an aggregate demand function for imports and exports is defined as a function of import and export prices and the deficit in the balance of payments on current account, in a model with nontradable as well as traded goods. It is shown that this function is integrable, hence can be generated by maximizing a utility function (w...

Many studies have estimated the aggregate import demand function for Pakistan by using non-stationary data. Their findings suffer from the so-called ‘spurious regression’ problem. This study attempts to estimate the aggregate import demand function for Pakistan by employing Johansen and Juselius cointegration technique on the annual data for the period 1975-2005. Our results show that there is ...