Afonso, AntónioHuart, FlorenceJalles, João TovarStanek, Piotr2020-05-062020-05-062020-05Afonso, António ... [et al.] (2020). "Long-run relationship between exports and imports: current account sustainability tests for the EU". Portuguese Economic Journal, 19(2):155-1701617-982X (Print)1617-9838 (Online)http://hdl.handle.net/10400.5/20066We assess the sustainability of external imbalances for EU countries using panel stationarity tests of Current Account (CA) balance-to-GDP ratios and panel cointegration of exports and imports of goods and services, for the period 1970Q1– 2015Q4. We find that: i) the country panel is non-stationary; ii) cross-sectional dependence plays an important role; iii) there is non-stationarity of the CA, imports, and exports with cross-sectional panel dependence and multiple structural breaks; iv) however, there is a stable long-run relationship between exports and imports in the panel. Hence, trade imbalances can be less unsustainable but this is not sufficient to make current account imbalances sustainable.engCurrent accountExportsImportsUnit rootsCointegrationjournal article10.1007/s10258-019-00168-x