Abstract:We consider the response of each of the 67 industries that trade between the United States and United Kingdom to the volatility of the real dollar-pound exchange rate. When we follow previous research and estimate a linear ARDL model for each industry, we find short-run effects of volatility in 22 US exporting industries to the United Kingdom that last into the long run only in nine industries. As for the UK exports to the United States, we find short-run effects in 18 industries that last into the long run in… Show more
“… For some other application of these models see Halicioglu (2007), Gogas and Pragidis (2015), Durmaz (2015), Baghestani and Kherfi (2015), Al‐Shayeb and Hatemi‐J. (2016), Lima et al (2016), Nusair (2012, 2016), Aftab et al (2017), Arize et al (2017), Gregoriou (2017), Lucarelli et al (2018), Istiak and Alam (2019), Hajilee and Niroomand (2019), Olaniyi (2019), Baek (2020), Bahmani‐Oskooee (2020), Bahmani‐Oskooee and Nasir (2020), Bahmani‐Oskooee et al (2021), and Nasir and Leung (2021). …”
The J‐curve hypothesis asserts that a depreciation could worsen the trade balance in the short run but improves it in the long run. In testing the hypothesis, almost all previous studies used trade data in goods only. We add to this literature by considering the US trade in insurance and financial services with each of its nine trading partners. Using quarterly data over the period 2003Q1–2019Q4, when we estimated a linear model, we found limited support for the J‐curve effect. However, when we estimated a nonlinear model to assess the possibility of asymmetric response of a service trade to exchange rate changes, we found much more support for the hypothesis. Precisely, we found support for the asymmetric J‐curve in the US insurance (finance) trade with Australia, Belgium, France, and Korea (Australia, Germany) and asymmetric inverse J‐curve in the US insurance (finance) trade with Germany, Italy, and United Kingdom (Belgium, Canada).
“… For some other application of these models see Halicioglu (2007), Gogas and Pragidis (2015), Durmaz (2015), Baghestani and Kherfi (2015), Al‐Shayeb and Hatemi‐J. (2016), Lima et al (2016), Nusair (2012, 2016), Aftab et al (2017), Arize et al (2017), Gregoriou (2017), Lucarelli et al (2018), Istiak and Alam (2019), Hajilee and Niroomand (2019), Olaniyi (2019), Baek (2020), Bahmani‐Oskooee (2020), Bahmani‐Oskooee and Nasir (2020), Bahmani‐Oskooee et al (2021), and Nasir and Leung (2021). …”
The J‐curve hypothesis asserts that a depreciation could worsen the trade balance in the short run but improves it in the long run. In testing the hypothesis, almost all previous studies used trade data in goods only. We add to this literature by considering the US trade in insurance and financial services with each of its nine trading partners. Using quarterly data over the period 2003Q1–2019Q4, when we estimated a linear model, we found limited support for the J‐curve effect. However, when we estimated a nonlinear model to assess the possibility of asymmetric response of a service trade to exchange rate changes, we found much more support for the hypothesis. Precisely, we found support for the asymmetric J‐curve in the US insurance (finance) trade with Australia, Belgium, France, and Korea (Australia, Germany) and asymmetric inverse J‐curve in the US insurance (finance) trade with Germany, Italy, and United Kingdom (Belgium, Canada).
“…[59] ), interdependencies of exchange rate and trade in time (e.g. [60][61][62] ) and the effects of real exchange rate depreciation on prices [63] . However, in the AR design, short-term volatility during the structural change may be treated as an error of the model.…”
This study summarises the main agricultural policies in Russia during 2014 and uses a sharp regression discontinuity design over time and data from the International Trade Centre to estimate the short-term effects of exchange rate liberalisation in November 2014 on import prices in Russian food markets. The sharp regression discontinuity design over time allowed an expost analysis of the short-term causal effects of the intervention on food import prices and distinguishing the effect of exchange rate liberalisation between product groups and from other interventions without using data from control regions, products and suppliers. Significant upward shifts in import prices were found for pig products, fish and cheese.
“…Up until now, the literature on Korea has mostly concentrated on either the second or third of these approaches in examining how exchange rates affect Korea's trade (e.g., Baek, 2012Baek, , 2013Chang, 2009;Kim, 2009). Further, even empirical evidence on Korea's trade in the most recent literature has been limited to only a few countries such as China and the United States (Baek & Nam, 2021;Bahmani-Oskooee & Baek, 2021). Evidently, there remains a strong need to learn more about the subject for other trading partners.…”
The contribution of the current article is to detect the asymmetric impact that exchange rate fluctuations have on Korea's trade with Vietnam. To this end, the nonlinear autoregressive distributed lag (NARDL) process is applied to export and import data disaggregated by 25 commodities. We uncover that the ups and downs of exchange rates have an asymmetric impact on some, though not all, types of Korea's commodities exported to and imported from Vietnam in both the long-and short-run.
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