Are Imports and Exports Cointegrated in Pakistan? A Rolling Window Bound Testing Approach

This study investigates the correlation between exports and imports in the case of Pakistan by using the variance decomposing analysis and rolling window bound testing approach to determine the stability of cointegration over the sample. The results from variance decomposition indicate that imports cannot cause the exports but in contrast the exports effectively cause imports. Cointegration stability test confirms that imports cause the exports from the period of 2003 to over the sample size and exports cause the imports from 1994 to 2004