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- Title
THE PERMANENT INCOME THEORY OF DEMAND FOR IMPORTS OF FINISHED MANUFACTURED GOODS: THE CASE OF THE UNITED STATES.
- Authors
Doroodian, Khosrow
- Abstract
Studies in international trade have suffered from a lack of empirical testing of the validity of permanent income hypothesis. This study attempts to fill the gap by developing an import demand function that includes transitory and permanent income as explanatory variables. The results are compared with those obtained from a traditional model. The statistical findings support the permanent income hypothesis as much as they support the current income hypothesis. Thus, the policy implications based on the latter hypothesis do not seem to be called into question when the former hypothesis is substituted for the current income hypothesis.
- Subjects
ECONOMIC demand; INTERNATIONAL trade; INCOME
- Publication
Quarterly Journal of Business & Economics, 1987, Vol 26, Issue 1, p78
- ISSN
0747-5535
- Publication type
Article