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An empirical analysis of sustainability of trade deficit: evidence from South Asian countries

Conference Paper


Abstract


  • 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 Nepal¿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.

Publication Date


  • 2008

Citation


  • Verma, R. & Perera, N. (2008). An empirical analysis of sustainability of trade deficit: evidence from South Asian countries. Australian Conference of Economists (p. [22]). Brisbane: Economic Society of Australia.

Ro Metadata Url


  • http://ro.uow.edu.au/commpapers/2368

Start Page


  • [22]

Place Of Publication


  • Brisbane

Abstract


  • 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 Nepal¿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.

Publication Date


  • 2008

Citation


  • Verma, R. & Perera, N. (2008). An empirical analysis of sustainability of trade deficit: evidence from South Asian countries. Australian Conference of Economists (p. [22]). Brisbane: Economic Society of Australia.

Ro Metadata Url


  • http://ro.uow.edu.au/commpapers/2368

Start Page


  • [22]

Place Of Publication


  • Brisbane