In this paper, the long-run relationship between exports and imports of south Asian
countries is examined. We explore this issue using the bounds-testing approach to
cointegration. The results failed to support the existence of a long-run equilibrium
relationship between exports and imports in Bangladesh India and Sri Lanka; while
for Pakistan, the results are inconclusive. Only in NepalÂ¿s case, cointegration
between exports and imports is detected. These findings question the effectiveness
of these countries current long-term macroeconomic policies and suggest these
south Asian countries are in violation of its international budget constraint.