Japanese Trade Elasticities and the J-Curve

Noland, Marcus

doi:10.2307/1928067

Cited by 77 publications

(50 citation statements)

References 2 publications

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“…the trade balance worsened in the first quarter to gradually improve in the following quarters, and to achieve balance only in the eleventh quarter. Research studies Noland (1989) and Petrović and Gligorić (2010) have confirmed our results.…”

Section: Resultssupporting

confidence: 89%

Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

Kurtović

Halili²,

Maxhuni³

2017

Naše Gospodarstvo/Our Economy

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The paper investigates the effect of the real effective exchange rate depreciation of the lek on the trade balance of Albania using quarterly data from 1994 to 2015. Bounds testing cointegration approach, vector error correction model (VECM), and impulse response were used for the empirical analysis. The results of the study show a long-term cointegration between the real effective exchange rate (REER) and the trade balance (TB). Specifically, the REER depreciation positively affects the trade balance of Albania in both the long and short run, indicating the weak presence of the J-curve effect. Important recommendations were derived from the results.

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Section: Resultssupporting

confidence: 89%

Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

Kurtović

Halili²,

Maxhuni³

2017

Naše Gospodarstvo/Our Economy

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“…In estimations, initially, the trade balance worsened in 5 quarters, then improved and reached a new equilibrium in the next 13 quarters. An earlier study by Marcus Noland (1989) on the economy in Japan, with quarterly data during the period from 1970 to1985, also supported these findings. Specifically, the results showed that the estimated price elasticity in the long-term met the Marshall -Lerner condition and implied the exchange rate devaluation improved the trade balance in the long term.…”

Section: The Relationships Of Trade Balance and Exchange Rate In Devementioning

confidence: 56%

The Impact of Exchange Rate on Market Fundamentals: A Case Study of J-curve Effect in Vietnam

My¹,

Sayim²,

Rahman³

2017

RAE

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This study examines if there is an equilibrium relationship between gross domestic product (GDP), exchange rate fluctuation and trade balance in long-term and short-term in Vietnam. The results show that the short-term and long-term exchange rate fluctuations impact the trade balance in Vietnam; both ARDL (Autoregressive Distributed Lag) and ECM (Error Correction Model) methodologies implied that exchange rate has a statistically negatively impact on the trade balance. Particularly, Autoregressive distributed lag (ARDL) utilized to test the long -term impact, shows the trade balance deficit becomes worse when the REER (real effective exchange rate) increases. ECM (Error Correction Model) equation based on the long-term cointegration equation and impulse response, reveals that the domestic currency devaluation could not improve the trade balance, indicating that the J-curve effect does not hold on the dong, the currency of Vietnam.

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“…Various papers investigated whether there is a so-called "J-curve", with devaluations leading to a short-run deterioration of the TB but a long-run improvement (see Bahmani-Oskooee, 1985;Rahman, Mustafa, and Burckel, 1997;Himarios, 1989;Rose and Yellen, 1989;Briguglio, 1989;Noland, 1989;Rose, 1990;Berument, 2005), with mixed results. Most studies use bilateral aggregate data (see, e.g., Boyd et al, 2001;Lal, and Lowinger, 2002;Onafuwora, 2003;McDaniel, and Agama, 2003;Fullerton and Sprinkle, 2005;Bahmani-Oskooee et al, 2006;Narayan, 2006;Bahmani-Oskooee, and Hegerty, 2011;Dash, 2013;Costamagna, 2014), again providing mixed evidence.…”

Section: Literature Reviewmentioning

confidence: 99%

Competitive Devaluations in Commodity-Based Economies: Colombia and the Pacific Alliance Group

Caporale

Costamagna²,

Rossini

2016

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. This paper investigates whether there is an S-Curve in Colombia using bilateral and disaggregated quarterly data for the period 1991-2014. More precisely, the short-run effects of a depreciation on the TB are analysed in 27 industries covered by the PAG Free Trade Agreement. The S-Curve found in sectors representing 30% of total industrial production suggests that in these cases competitive devaluations have a positive effect on the TB in the short run. However, the regression analysis using both OLS and FE methods shows that sizable ones are needed to produce the desired effects on trade flows. Our findings have important policy implications: since only large competitive devaluations can restore TB equilibrium, industrial restructuring would appear to be a more sensible strategy, though this cannot be achieved in the short run and is instead a medium/long-term goal. Terms of use: Documents inJEL-Codes: F100, F400, O100.

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Japanese Trade Elasticities and the J-Curve

Cited by 77 publications

References 2 publications

Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

The Impact of Exchange Rate on Market Fundamentals: A Case Study of J-curve Effect in Vietnam

Competitive Devaluations in Commodity-Based Economies: Colombia and the Pacific Alliance Group

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