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External constraint and India's import behaviour: An analysis in the almost ideal demand system framework
Author(s) -
Ray Ranjan,
Chatterjee Srikanta
Publication year - 1993
Publication title -
journal of international development
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.533
H-Index - 66
eISSN - 1099-1328
pISSN - 0954-1748
DOI - 10.1002/jid.3380050303
Subject(s) - almost ideal demand system , economics , rationality , ideal point , constraint (computer aided design) , ideal (ethics) , preference , econometrics , point (geometry) , homogeneity (statistics) , microeconomics , production (economics) , mathematics , statistics , philosophy , geometry , epistemology , political science , law
This paper analyses India's import sourcing over the period 1960–85 in a preference‐consistent, utility‐maximizing framework using the ‘almost ideal demand system’. Assuming separability between exports, imports and domestic production, the paper estimates unrestricted, homogeneity and symmetry‐constrained versions of this demand system on Indian import data, and tests for the empirical validity of the restrictions. The results are analysed and some implications for commercial policy changes examined. The empirical evidence of this exercise seems to point to the need for a wider concept of ‘rationality’ than has been used in the recent literature, particularly when estimating preference‐consistent import‐export demand functions of a developing mixed economy with central planning.