The Elasticity Of Imports From Asian Countries

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Price Elasticities in Asia Bruce Cadwallader, Kelsey Seeds, Mary Taylor, Gloria Tolson Ohio Dominican University MBA640 The Issue The issue at hand is the elasticity of imports and exports in Asian countries and why the import and export demand elasticities are not constant as one would think. Import and export demand can change the price and income variables of a country. The study found that in Asian countries, if imports are price inelastic there will be a rise in import prices and will lead to an increase in the import bill. If imports of these countries are income elastic, an increase in incomes will lead to a more proportionate increase in imports. If exports from Asian countries are price inelastic, export earnings will rise as the prices increase. If exports from these countries are income elastic, an increase in incomes worldwide will lease to a greater than proportionate increase in exports (Keat, Young & Erfle, 2013). The study consisted of five different Asian countries, India, Japan, Philippines, Sri Lanka, and Thailand. It was found that all five countries had inelastice price and income elasticities on import demand. Whereas, three of the five countries were price elastic on export demand, but only Japan was income elastic on export demand (Sinha, 2001). Table 1 Price Elasticities in Asia Country Imports Price Imports Income Exports Price Exports Income India -0.51 -0.11 -0.55 0.45 Japan -0.91 0.84 -0.80 2.84 Philippines -0.17 0.57
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