RDP 9312: A Re-examination of the Determinants of Australia's Imports Appendix 3: Results

Jacqueline Dwyer and Christopher Kent

December 1993

Results are based on the P-H estimates of the long-run equilibrium. (For the sake of brevity, long-run constants are not reported.) The existence of cointegration was tested by examining the significance of the error correcting terms in the P-H error correction model (ECM). Kremers, Ericsson and Dolado (1992) demonstrate that this is a more powerful test for cointegration than direct tests based on the residuals of the cointegrating relationship. Standard errors of the ECM were corrected for hetroscedasticity and autocorrelation where necessary. Further details of these estimates are available from the authors on request.

Table A3.1: Results
(September quarter 1974 to March quarter 1993, unless otherwise indicated)
Import Component Activity Relative Price Protection Coefficient on LR Error
Endogenous total 1.55 GNE
(0.05)		 −0.42 PM
(0.13)		   −0.44
(0.17)
Endogenous total 1.50 GNE
(0.06)		 −0.41 PML
(0.13)		   −0.43
(0.13)
Endogenous total 1.57 GNE
(0.07)		 −0.41 PM
(0.13)		 −0.04 Z
(0.49)		 −0.43
(0.12)
Endogenous total * 1.62 GNE
(0.06)		 −0.37 PM
(0.09)		   −0.69
(0.22)
  0.71 PX
(0.22)		    
  −0.75 PS
(0.37)		    
Endogenous total * 1.49 GNE
(0.06)		 −0.38 PM
(0.11)		   −0.73
(0.18)
  0.33 PS
(0.23)		    
Consumption ** 1.71 GNE
(0.08)		 −0.82 PMc
(0.12)		   −0.91
(0.31)
Consumption ** 1.48 GNE
(0.11)		 −0.78 PMc
(0.10)		 −1.59 Z
(0.54)		 −0.71
(0.13)
Consumption ** 1.74 PC
(0.09)		 −0.70 PMc
(0.14)		   −0.67
(0.15)
Consumption ** 1.70 PC
(0.17)		 −0.70 PMc
(0.14)		 −0.21 Z
(0.83)		 −0.70
(0.13)
Intermediate ** 1.41 GNE
(0.09)		 −0.04 PMi
(0.17)		   −0.53
(0.22)
Intermediate ** 1.22 GNE
(0.15)		 0.00 PMi
(0.15)		 −1.32 Z
(0.59)		 −0.83
(0.30)
Intermediate ** 1.49 GNFP
(0.12)		 −0.18 PMi
(0.12)		   −0.58
(0.24)
Intermediate ** 1.41 GNFP
(0.20)		 −0.17 PMi
(0.12)		 −0.38 Z
(0.79)		 −0.55
(0.17)
Capital ** 1.44 GNE
(0.27)		 −0.75 PMk
(0.33)		   −0.46
(0.11)
Capital ** 2.04 GNE
(0.28)		 −0.72 PMk
(0.25)		 3.02 Z
(1.15)		 −0.46
(0.18)
Note: Standard errors are shown in parentheses. Equations denoted by * are estimated from the September quarter 1974 to the June quarter 1992. Equations denoted by ** are estimated from the September quarter 1979 to the March quarter 1993. Superscripts c, i, k denote the component implicit price deflators for the imports of consumption, intermediate and capital goods; PS is the price of import substitutes; PC is private consumption spending; and GNFP is gross non-farm product.