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An empirical analysis of sustainability of trade deficit: evidence from Sri Lanka

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posted on 2024-11-14, 05:42 authored by Nelson Perera, Reetu VermaReetu Verma
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.

History

Citation

This article was originally published as Perera, N and Verma, R, An empirical analysis of sustainability of trade deficit: evidence from Sri Lanka, International Journal of Applied Econometrics and Quantitative Studies, 5(1), 2008, 71-92.

Journal title

International Journal of Applied Econometrics and Quantitative Studies

Volume

5

Issue

1

Pagination

79-92

Language

English

RIS ID

24368

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