THE PAKISTAN DEVELOPMENT REVIEW
Is There Seasonality in Pakistan’s Merchandise Exports and Imports? The Univariate Modelling Approach
This paper investigates the existence of seasonal patterns in the quarterly merchandise export and import data of Pakistan from 1982:1 to 2002:1. Unit root tests are applied to determine whether the seasonal component in each variable exhibits stochastic non-stationarity. Deterministic and stochastic effects are isolated and quantified. Few alternate DGP specifications are identified, fitted and tested for their outof- sample forecasting performance. A tentative finding is that deterministic effects are relatively more important than stochastic ones. However, integrated models, i.e., ARIMA, mixed ARIMA, and ARIMA-GARCH, outperform deterministic models with respect to forecasting.