An analysis of the relationship between imports and gross domestic product in the Libyan ‎economy in the period 1990-2013‎

Abstract

The value of Libyan imports changes from year to year, and imports took a general rising trend in the period 1990-2013, and imports  increase by an annual rate of 1517.846 million dinars. Gross domestic product changes from year to year and it took a general rising trend in this period, and it increases by an annual rate of 1938.212 million dinars. Imports represent a considerable percentage of GDP, this percentage varies from year to year and ranges between 10% and 89% in the years 1992 and 2013 respectively, and in average, imports represent 38% of GDP during this period. From the regression of current values of imports on the current values of GDP, imports and GDP are positively related, and if GDP increases by one million dinars, imports would increase by 0.610 million dinars, but this model suffers from the problem of autocorrelation, which was corrected by regressing the changes of imports on the changes of GDP, the new model shows that, a one million dinars increase in GDP would increase imports by 0.325 million dinars. Koyck lag model is estimated to eliminate difficulties result from estimating lag model of imports, from Koyck lag model, if GDP increases by one million dinars, imports would increase by 0.374 million dinars, and because this model presents the problem of autocorrelation, and after doing the required correction, the model showed that, a one million dinars increase in GDP would increase imports by 0.323 million dinars. All the acceptable estimated models showed that imports and GDP are positively related, the effect of GDP on imports is significant, and the amounts by which GDP affects imports are close to each other.

Key Words: imports, gross domestic product, general trend, lag model.