The Effect of Tariff Barriers Reduction on Aggregate Import of Goods in Iran: Using ARDL Bounded Test

On the basis of its national and international goals, each country uses specific policies in different fields including trade. In recent years, a main topic of debate among economists has been the relationship between trade liberalization and import performance in developing countries. The main motivation of countries in moving toward trade liberalization is to obtain economic growth and development and a higher share in global economy. This study investigates the effect of tariff reduction and non-tariff barriers elimination on import of goods in Iran, using time series data during 1971-2007. In order to determine the relationship between import of goods and trade liberalization, we use the ARDL econometric model and three main variables: real import of goods, imports tariff rates, a dummy variable of liberalization (as a simplification of non-tariff measures), in addition to some control variables (such as relative price of imports, GDP).; Research findings indicate that the demand for imported goods in Iran, is elastic to relative prices and real GDP in both long and short-run. Furthermore, import of goods is inelastic to import tariff rate in long and short-run, while in a complete trade liberalization condition, imports will increase. Also, error correction model results show that the coefficient can be quickly adjusted to the long-run equilibrium (balance), in such a way that in each period 84% of non-equilibrium is adjusted.; ;