OBJECTIVES: The basic objective of this study is to use the cointegration and error correction methodology to estimate for Jamaica, Guyana, and Trinidad and Tobago short-term and long-term elasticities for the various determinants of import demand. In addition, the study will compare the recently developed disaggregated expenditure components model of import demand with the traditional model of import demand for the purpose of determining which model provides a better fit for the data.

DATA/METHODS: For the three countries, the period of analysis will be from 1976 to 2005. Regression analysis will be used to estimate two import demand models. The first will be the traditional import demand model as set out by Houthakker and Magee (1969), Leamer and Stern (1970), Gafar (1995), Goldstein and Kahn (1985), Kahn and Ross (1977), and Salas (1982). The second will be the recently developed disaggregated expenditure components model of import demand as described by Giovannetti (1989), Abbott and Seddighi(1996), Mohammed and Tang (2000), Narayan and Narayan (2005), and Tang (2003). The data for this exercise will come from a variety of sources including: 1. the International Monetary Fund, International Financial Statistics, Yearbook; 2. the Inter-American Development Bank, Economic and Social Progress in Latin America; 3. the United Nations Statistics Division. National Accounts.

RESULTS/EXPECTED RESULTS: The empirical results are expected to show that import demand in Jamaica, Guyana and Trinidad and Tobago is positively responsive not only to income but also to the disaggregated components of income such as consumption, investment, and exports. In addition to this, the results should show that there is an inverse relationship between import demand and the relative price for imports. Beyond this, various diagnostic tests will be undertaken in order to determine if the disaggregated expenditure components model of import demand provides a better fit for the data than the traditional import demand model.