Title

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

RIS ID

25651

Publication Details

Verma, R. & Perera, N. (2008). An empirical analysis of sustainability of trade deficit: evidence from South Asian countries. The 37th Australian Conference of Economists (p. [22]). Brisbane: Economic Society of Australia.

Abstract

In this paper, the long-run relationship between Sri Lankan exports and imports during the period 1950 to 2006 is examined using unit root tests and cointegration techniques that allow for an endogenously determined structural break. The results failed to support the existence of a long-run equilibrium between exports and imports in Sri Lanka. This finding questions the effectiveness of Sri Lanka’s current long-term macroeconomic policies and suggests that Sri Lanka is in violation of its international budget constraint.

Link to publisher version (URL)

Australian Conference of Economists

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