Exports and Imports Nexus: Econometric Evidence for Pakistan

The IUP Journal of Applied Economics, Vol. 9, No. 2, pp. 34-45, April 2010

Posted: 10 Apr 2010

See all articles by Muhammad Qaiser Shahbaz

Muhammad Qaiser Shahbaz

COMSATS Institute of Information Technology (CIIT)

Muhammad Shahbaz Shabbir

COMSATS Institute of Information Technology (CIIT)

Muhammad Sabihuddin Butt

University of Karachi

Date Written: April 7, 2010

Abstract

The main idea of this present effort is to analyze the long-run relationship between Pakistan’s exports and imports by employing advanced techniques like Johansen-Juselius cointegration technique, and to study the short-run dynamics through Granger causality in the VECM framework. The empirical evidence reveals that Pakistan’s exports and imports show a long-run relationship. Thus, the short-run fluctuations between exports and imports will not sustain as in the long run, exports and imports will eventually converge towards an equilibrium state, but improving impact of exports on imports is less than unity in all cases. However, in the short run, causation runs from exports to imports and vice versa. The present endeavor may show a new direction to policy-making authorities.

Suggested Citation

Shahbaz, Muhammad Qaiser and Shahbaz Shabbir, Muhammad and Sabihuddin Butt, Muhammad, Exports and Imports Nexus: Econometric Evidence for Pakistan (April 7, 2010). The IUP Journal of Applied Economics, Vol. 9, No. 2, pp. 34-45, April 2010, Available at SSRN: https://ssrn.com/abstract=1585728

Muhammad Qaiser Shahbaz (Contact Author)

COMSATS Institute of Information Technology (CIIT) ( email )

Park Road
Chak Shahzad
Islamabad, North-West Frontier Province 44000
Pakistan

Muhammad Shahbaz Shabbir

COMSATS Institute of Information Technology (CIIT) ( email )

Park Road
Chak Shahzad
Islamabad, North-West Frontier Province 44000
Pakistan

Muhammad Sabihuddin Butt

University of Karachi ( email )

University Road
Karachi, SC Sind 75270
Pakistan

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