In this study, import demand function of Iran has been analyzed with Pesaran and Shin method for 1960-2005. The results showed import demand is elastic related to increasing in gross domestic income. Thus, increasing in economic growth and national income increase balance of trade deficit and government could decrease balance of trade deficit with economic growth, simultaneously, so that imposes suitable fiscal polices like reducing in expenditure. Import growth because of increasing in gross domestic income showed Iran is going to open economy but it wouldn’t be cause of decreasing in production and competition power of domestic firms and producers.

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