Are exports and imports of Saudi Arabia cointegrated? An empirical study
The objective of this study is to examine the long run cointegration between exports and imports of Saudi Arabia for the period 1968-2013. Using Johnson’s approach of cointegration this study finds that exports and imports converge towards equilibrium in the long run implying that the trade policy is being managed well as per its comparative advantage and there is both long run and short run causality running from exports to import. Importantly, this study improves upon the results of the only other study on Saudi Arabia (to the author’s best of knowledge) by including the Vector Error Correction Model (VECM). Also, this study advocates caution while using EViews6 with smaller datasets.
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Volume (Year): 15 (2015)
Issue (Month): 1 ()
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