Iran’s Industrial Import Demand

Abstract

In this paper, we study the level of efficacy of different factors on industrial import, including oil and gas export foreign exchange revenue, real effective exchange rate, and import control policy in short term and long run. The results demonstrate that oil revenue highly affects industrial imports in long run. Moreover, industrial import was inelastic. In comparison with long-run, the short term import price elasticity was relatively lower. This reflects the fact that there is higher flexibility in domestic industries for import substitution in long term in Iran.