Structural change in import demand behavior: the Korean experience

The structural stability of Korea's import demand is examined using the elasticity approach. The analysis of quarterly data for the years 1971-1988 indicates one, or possibly two, structural breaks. This structural break is linked to the import liberalization measures adopted by Korea's government in the early 1980s. New estimation results, after the structural break is considered, show that the income and the price elasticities are more responsive over time.