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This work aims to analyze the impact of final expenditure components on import demand in Pakistan. Studying Import demand behaviour is important in economic literature because it has vast implications in tackling the problem of trade deficit faced by most of the developing and less developed countries of the world. It is more than just theoretical debate because it contains a rigorous empirical analysis by using the modern econometric techniques. Although it is a case study of developing South Asian country, Pakistan, yet the inference drawn may also be helpful for the policy makers of other developing countries facing the same situation. This information may also be useful for efficient utilization of both expenditure switching and expenditure dampening policies to overcome the above mentioned problem of trade deficit. This work is also helpful in providing directions for industrial policy.
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