Abstract
Abstrac-t-We offer a method for establishing the distributed lag structure in import demand models a priori. We consider a firm which imports raw materials in a world of uncertainty. Traditional considerations of adjustment and inventory holding costs lead to a forward looking import decision rule. Linear rational expectations modelling allows us to transform the forward looking rule into a finite distributed lag specification. While the resulting model is similar in form to earlier empirical models, it is not subject to the Lucas Critique. The model is fitted to U.S. data over the period 1954-1980.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
