2014•Unpublished venueRequires access

ARE EXPORTS AND IMPORTS COINTEGRATED? EVIDENCE FROM NINE

Mena Countries, Jamal Husein

Abstract

The aim of this article is to examine the long-run convergence (cointegration) between exports and imports for nine MENA (Middle East and North Africa) countries. Evidence of cointegration ensures that trade imbalances are sustainable. The article explores this issue by applying the bounds testing approach to cointegration and by using annual data. The findings of cointegration between exports and imports for Iran, Israel, Jordan, and Tunisia indicate that these countries are not in violation of their international budget constraint. In addition, the CUSUM and CUSUMSQ tests confirm stability of the estimated parameters. JEL Codes:

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Key concepts: Cointegration, Economics, CUSUM, Constraint (computer-aided design), Convergence (economics), International economics, Budget constraint, Econometrics