Exchange Rate Dynamics and the Bilateral Trade Balance: The Case of U.S. Agriculture
AbstractThis study examines the dynamic effects of changes in exchange rates on bilateral trade of agricultural products between the United States and its 15 major trading partners. Special attention is paid to investigate whether or not the J-curve hypothesis holds for U.S. agricultural trade. For this purpose, an autoregressive distributed lag (ARDL) approach to cointegration is applied to quarterly time-series data from 1989 and 2007. Results show that the exchange rate plays a crucial role in determining the short- and long-run behavior of U.S. agricultural trade. However, we find little evidence of the J-curve phenomenon for U.S. agricultural products with the United Statesâ€™ major trading partners.
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Bibliographic InfoArticle provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.
Volume (Year): 38 (2009)
Issue (Month): 2 (October)
agricultural trade; autoregressive distributed lag approach to cointegration; bilateral trade; J-curve effect; International Relations/Trade; Research Methods/ Statistical Methods;
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