An aggregate import demand function for Sudan : a cointegration analysis

الملخص EN

This paper investigates the existence of an aggregate import demand function for Sudan, during the period 1978– 2018.

The paper employs an Autoregressive Distributed Lag (ARDL) and bounds testing approach to cointegration.

It also estimates an error correction model to separate the short- and long-run elements of the import demand relationship.

The findings of the unit root tests, specifically Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) tests, indicate that all series were integrated of order one.

It suggests that there exists a long-run relationship between aggregate imports and the main determinants, namely, real income, relative prices, foreign exchange reserves, and terms of trade.

The error correction term suggests a fast speed of convergence to equilibrium.

Stability tests demonstrate no evidence of serial correlation problem in the residuals.

It finds that international reserves were the most important determinant of demand for aggregate imports.

The results reveal that an improvement in foreign exchange reserves increases import demand.

Thus, policies targeted at augmenting foreign exchange reserves will boost imports.