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in the table below. The ECM was estimated using a VECM. The VECM captures both the long run equilibrium and the short run dynamics of the model.

The results report that exchange rate volatility is insignificant in the short run also. The coefficient of LRY is positive and significant at 1%. The impact of a change in real GDP is even more significant in the short run than in the long run, since a 1% increase in change in real GDP leads to a 11.5% increase in growth of volume of exports. This is because an increase in real GDP tends to have a higher immediate effect than in the long run as in the long run, the economy will tend to adjust itself to reach its initial equilibrium. That is in the long run the foreign economy will be able to increase its domestic output to meet any excess demand caused by an increase in income.

?LCUt is significant at 10% with a negative coefficient. This is because an increase in capacity utilisation will have a supply side effect on the country's level of output. That is if a country is increasing its capacity utilisation, it will be able to increase domestic output. Hence there might be a temporary shift from consumption of foreign products to locally produced goods. However LCU does not have any effect on volume of exports from Mauritius in the long run.

As regards the coefficient of ?LRERt, it is positive and significant. A 1% increase in growth of exchange rate leads to a 1.97% increase in growth of volume of exports. The effect of exchange rate is greater in the long run which supports the view put forward by Bahmani-Oskooee(1986) who concluded that trade flows are more responsive to changes in exchange rates in the long run.

The coefficient of ?LINVGt is insignificant. This is because in the short run an increase in investment may not have any significant effect on the level of exports since it is only in the long run that productivity and output will increase as a results of an increase in investment.

Also ?LINFt does not have any immediate effect on volume of export as in the short run since there's always the expectation that inflation will decrease. Also there's less scope to switch consumption to other products in the short run than in the long run where the importing country, i.e USA, can look for cheaper products from other countries.

The coefficient of the error correction term Rt-1 is significant and negative which confirm the existence of a long run relationship between exports and the explanatory variables. It's coefficient is 0.014 which is quite low which suggest a low speed of adjustment from the short run deviation to the long run equilibrium in LREXP. It indicates that only 1.4% of the deviation is corrected every year.

4.7 评估的结果导出功能——4.7 Estimation result of Export Function

4.7.1 长期方程——4.7.1 The long run equation

Our Long-run equation can be formulated as follows:

The results indicate that all the variables are significant except for volatility. Therefore volatility does not have any effect on volume of imports also. Gotur(1985), Cushman(1986) obtained similar results in their studies.

LRGDP is again the major determinant of volume of imports from USA with a coffecient of 1.39. This means that a 1% increase