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The Le Châtelier Principle and the Demand for Imports in the Short Run and the Medium Run: Australia, 1959–60–1978–79*
Author(s) -
KOHLI ULRICH R.
Publication year - 1983
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/j.1475-4932.1983.tb00590.x
Subject(s) - economics , short run , allowance (engineering) , capital (architecture) , monetary economics , econometrics , operations management , archaeology , history
This paper examines the role of prices and factor endowments in the determination of Australian imports. We consider two factors, labour and capital. The supply of capital is assumed fixed, labour is assumed fixed in the short run. and variable in the medium run, Direct as well as indirect estimates of short‐run and medium‐run import price and quantity elasticities are derived. Allowance is made for technological change, and various separability hypotheses are tested. As predicted by the Le Châtelier Principle. the own price elasticity of imports is larger in the medium run than in the short run .