Real Exchange Rates and the Balance of Trade: Does the J-curve Effect Really Hold?

Autor:	Serda Selin Ozturk, M. Ege Yazgan
Rok vydání:	2018
Předmět:	Economics and Econometrics 050208 finance Short run Depreciation 05 social sciences Balance of trade Monetary economics Bilateral trade Currency 0502 economics and business Economics J curve 050207 economics Marshall–Lerner condition Panel data
Zdroj:	Open Economies Review. 30:343-373
ISSN:	1573-708X 0923-7992
Popis:	In this paper, we re-examine the relationship between trade flows, real effective exchange rates, and incomes by using the bilateral trade flows of 33 countries that form more than two-thirds of total world trade. For each country, we consider the bilateral trade flows of the country under consideration vis-a-vis all other countries. The analysis reveals the fact that for most of the countries, a real depreciation of the home currency has favorable effects on the home country’s trade balance in the long run. This long-run effect manifests itself in the short run for a small number of countries, indicating the fact that satisfying the Marshall-Lerner condition in the short run is more difficult. However, there is no evidence for the J-curve phenomenon, which suggests an initial deterioration in the trade balance in the short run following a depreciation.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::e4d3b6751d3f3d3ad139647fae435c2b https://doi.org/10.1007/s11079-018-9510-3 Zobrazit plný text záznamu Full text from SpringerLink