Imports-Exports Correlation: A New Puzzle?

Ricardo Bebczuk ()

No 200833, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department

Abstract: This paper shows that a puzzling yet strong correlation exists between imports and exports. Cross-section and time-series analysis for the broadest possible country sample (159 countries over 1960-2006) attests to the robustness of this finding, even though causality is not explored in depth. After ruling out common factors driving simultaneously imports and exports, as well as systematic government interventions, we favor two weighty explanations. The first one is the presence of international financial constraints, in the spirit of the Feldstein-Horioka literature. However, we contend that this is at most an incomplete rationale, and thus put forward a classic (but often neglected) argument relating exports, imports, and economic growth in the short and the long-run. Our results open room to rich and provocative policy implications as well as to the reinterpretation of commonly accepted notions in the analysis of open economies.

Keywords: cross-section analysis; economic growth; exports; imports; international financial constraints; time-series analysis (search for similar items in EconPapers)
JEL-codes: C21 C22 F10 F43 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2008-10
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http://www.bcra.gov.ar/pdfs/investigaciones/WP%202008%2033.pdf versión en Español (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:bcr:wpaper:200833

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