Abstract
The present study examines the presence of a long run relationship between imports and exports for 27 Organization of Islamic Conferences (OIC) member nations. The results of unit root and cointegration tests indicate that only four of them, namely Benin, Burkina Faso, Cameroon, and Guyana show a long run relationship between volume of imports and exports. This finding indicates that exchange rate and macroeconomic monetary or fiscal) policies may be effective to improve the countries’ trade balances in the long run. For other countries (no cointegration between their imports and exports), they are in violation of their international budget constraint, and exchange rate. Besides that, other macroeconomic policies are unfavorable to countries’ external balances in the long run.
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