Import demand, liberalization, and economic development

This paper examines the Melo-Vogt (1984) hypotheses concerning the relationship between import demand elasticities and trade liberalization during the process of economic development in Thailand. The results using first differenced variables to assure stationarity show that income elasticity increased with import liberalization, supporting the hypothesis. However, price elasticity is not shown to increase with economic development, unlike the hypothesis concerning the change in income elasticity. These results contradict those of previous researchers that used nonstationary variables. (C) 1999 Society for Policy Modeling. Published by Elsevier Science Inc.