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Inequality and the Import Demand in Turkey

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  • Zuhal Ozbay Das

    (Fenerbahce University, Faculty of Economics and Administrative Sciences, Department of Economics, Istanbul, Turkey)

Abstract

The study aims to see whether the long-run relation between inequality and import demand exists in Turkey. The Autoregressive Distributed Lag (ARDL) cointegration technique is used in this study to estimate the long-run relationships between real imports, income, relative price, real exports, and inequality for the period 1982-2015. The results revealed that the income elasticity of imports is greater than one as the literature suggests. The sign of the coefficient of relative price and its magnitude is also compatible with the literature, while it is not statistically significant. However, the results further reflect that inequality is positively associated with real imports in Turkey contrary to assumptions of the relation between inequality and imports that is found to be negative for lower income countries in some studies. Short-run coefficients reflect that real income and relative prices are associated with real imports, whereas exports and not surprisingly, inequality variables are not in the short-run. The coefficient of income parameter is less in magnitude in the short-run but still greater than one. However, the sign of the coefficient of the relative price turns out to be positive in the short-run.

Suggested Citation

  • Zuhal Ozbay Das, 2021. "Inequality and the Import Demand in Turkey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 71(71-2), pages 395-410, December.
    • Handle: RePEc:ist:journl:v:71:y:2021:i:2:p:395-410
    DOI: https://iupress.istanbul.edu.tr/en/journal/ije/article/inequality-and-the-import-demand-in-turkey
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    References listed on IDEAS

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    More about this item

    Keywords

    Import demand; Inequality; Cointegration JEL Classification: F14 ; D63;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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