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Export, Import Demand in Mongolia: Income and Price Elasticities

Author

Listed:
  • Batjargal, Dulamzaya
Abstract
This empirical research estimates the long-term price and income elasticities of Mongolia’s foreign trade using ARDL model and time series of foreign trade, GDP, prices, export and import prices from 2002 to 2018. The research findings confirm a long-term relationship between export and import demand and relative prices and income. Although the estimated price elasticities are relatively weak, with the import price elasticity at -0.65 and export price elasticity at 0.5, the Marshal-Lerner condition holds in the long run. This implies that the depreciation (appreciation) of Mongolian togrog improves (worsens) the trade balance. Moreover, the income elasticity of imports (1.6) is significantly higher than that of exports (0.46), indicating that an increase in domestic demand leads to a deterioration of the trade balance.

Suggested Citation

  • Batjargal, Dulamzaya, 2018. "Export, Import Demand in Mongolia: Income and Price Elasticities," MPRA Paper 124028, University Library of Munich, Germany, revised 2018.
    • Handle: RePEc:pra:mprapa:124028
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    File URL: https://mpra.ub.uni-muenchen.de/124028/1/MPRA_paper_124028.pdf
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    References listed on IDEAS

    as
    1. Gan-Ochir Doojav, 2018. "The Effect of Real Exchange Rate on Trade Balance in a Resource-Rich Economy: The Case of Mongolia," Foreign Trade Review, , vol. 53(4), pages 211-224, November.
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    More about this item

    Keywords

    Export demand; import demand; trade elasticity; ARDL model;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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