Pakistan’s Trade Performance vis-à-vis Its Major Trading Partners

Abstract

In contrast to earlier empirical research that documents the import and export price elasticities at an aggregate level, this article estimates bilateral price and income impacts on Pakistan’s trade performance with its four major trading partners, i.e., USA, UK, Germany, and Japan. Using quarterly data for the period 1982-I-1996-IV and the Three-stage Least Square technique, the study documents the impact of real devaluation, real income, export incentives, and domestic inflation on trade performance with respect to each of the four trading partners.