The Determinants of Aggregate Demand Function of Sudan

The main objective of this study is to estimate the determinants of the aggregate import demand function for Sudan during the period 1978 to 2014. The year 1978 was chosen because was the first year of devaluation as recommended by the IMF, and the year 2014 where the data were available. The study tests the stationary of individual series namely, domestic income, relative prices and exchange rate using the widely used the Augmented Dickey-Fuller (ADF) and Phillips-Peron (PP) statistics and Johansen co-integration techniques to estimate import demand function in the longrun. The estimated results indicate that there is long-run co-integration relation among the volume of imports, domestic income, relative prices and exchange rate. The results of this study suggest that GDP has greater effect on the quantity of import than the other determinants (price ratio and exchange rate).