FACTORS OF TRADE-DEFICIT CONVERGENCE IN ESTONIA ANALYSIS BASED ON PROPENSITY TO IMPORT Urmas Sepp Tallinn 1999 Working Papers of Eesti Pank No 1, 1999

CONTENTS

Authors CV

0. Introduction

1. Problem

2. Modelling of Imports

3. Import Factors

4. Import Propensity

5. Estimation of Import Propensity: a Concept

6. Equations of the System

6.1. Imported Input of Export Production

6.2. Import Propensity of External Demand

6.3. Import Propensity of Domestic Demand

7. Data

8. Solution of System

9. Empirical Equations

9.1. Import Propensity of Domestic Demand

9.2. Price Level as a Factor of Import Propensity

9.3. Import Propensity of Foreign Demand

10. Levels of Import Propensities

11. Simulation of the Trade Balance

12. Perspectives for Trade Balance Convergence

13. Conclusions

14. References

The author is grateful to Rasmus Pikkani and Mari Rell for their assistance in empirical work.