Export Supply and Import Demand Models: An Investigation from Pakistan

It was determined from the economic progress of the developed nations that the major reason of their underdevelopment was due to the absence of trade and their dependency on imports rather than exports because they were having a sub-standard level of mechanization. This study is an attempt to examine the relationship between exports and imports in Pakistan. Monthly data from 2003-2011 has been considered. Economic growth and Balance of Trade in Pakistan have previously been researched and keeping that researcher‟s work in mind this research proves that imports of Pakistan shows exceeding trend as compared to her exports. Unit Root Test demonstrates that imports appear to have a stronger impact on exports. The effect of export supply meeting the import demand is not modest. This paper finds no support for export supply meeting import demand hypothesis in Pakistan