Are exports and imports cointegrated? Evidence from two Pacific Island countries

Narayan, Paresh Kumar and Narayan, Seema 2004, Are exports and imports cointegrated? Evidence from two Pacific Island countries, Economic papers, vol. 23, no. 2, pp. 152-164.


Title Are exports and imports cointegrated? Evidence from two Pacific Island countries
Author(s) Narayan, Paresh Kumar
Narayan, Seema
Journal name Economic papers
Volume number 23
Issue number 2
Start page 152
End page 164
Total pages 13
Publisher Wiley - Blackwell
Place of publication Richmond, Vic.
Publication date 2004-06
ISSN 0812-0439
1759-3441
Summary The aim of this paper is to investigate whether there is long-run relationship between exports and imports for two Pacific Island Countries -- Fiji and Papua New Guinea (PNG). This is an important issue because long-run convergence will ensure that trade imbalances are sustainable. We explore this issue using the bounds-testing approach to cointegration and find that while exports and imports for Fiji and PNG are indeed cointegrated, the coefficient on exports is unity only in the case of Fiji. These results imply that Fiji satisfies the strong form of its intertemporal budget constraint while PNG satisfies only the weak form of its intertemporal budget constraint.
Language eng
Field of Research 140212 Macroeconomics (incl Monetary and Fiscal Theory)
HERDC Research category C1.1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024687

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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