Are exports and imports of Chile cointegrated?

This study examines the long-run relationship between Chilean exports and imports during the 1975-2004 period using unit root tests and cointegration techniques that allow for endogenously determined structural breaks. The results indicate that there exists a long-run equilibrium between exports and imports in Chile, despite the balance-of-payments crisis of 1982-83. This finding implies that Chile\'s macroeconomic policies have been effective in the long-run and suggests that Chile is not in violation of its international budget constraint.