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Are Imports and Exports Cointegrated? An International Comparison
Author(s) -
Irandoust Manuchehr,
Ericsson Johan
Publication year - 2004
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.0026-1386.2004.00182.x
Subject(s) - cointegration , economics , rest (music) , convergence (economics) , productivity , sample (material) , macroeconomics , international economics , developing country , monetary economics , econometrics , economic growth , medicine , chemistry , chromatography , cardiology
In this paper we use the Johansen and Juselius cointegration technique to examine the long‐run convergence between imports and exports for a number of industrialized countries. The results indicate that there exists a long‐run steady‐state relationship between imports and exports for most countries in the sample. The policy implications of our findings are that the countries are not in violation of their international budget constraints and, more importantly, there is no productivity gap between the domestic economy and the rest of the world, implying a lack of permanent technological shocks to the domestic economy.