Estimating Import Function in Libya

Abstract

The major objective of this paper was to estimate the short run and long run effect of the level of gross national income (GNI) on the value of imports (M).

Annual data of (GNI) and (M) were collected for the period 1970-1988. The estimated function showed that the short run marginal propensity to import was 0.144, and the short run marginal propensity to import was 0.21. The short and long run elasticities were also computed. The short run import elasticity was 0.538, and the long run import elasticity was 0.900. These results confirmed the theoretical assumption.