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Pakistan-EU Commodity Trade: Is there Evidence of J-Curve Effect?

Author

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  • Bahmani-Oskooee Mohsen

    (Center for Research on International Economics, University of Wisconsin, Milwaukee, WI 53201, USA)

  • Iqbal Javed
  • Muzammil Muhammad

    (School of Economics, Quaid-i-Azam University, Islamabad, Pakistan)

Abstract

In investigating the short run and the long run impact of currency depreciation on Pakistan’s trade balance, previous studies have either relied on using bilateral trade data between Pakistan and her trade partners or between Pakistan and the rest of the world and have found not much support for successful depreciation. Suspecting that these studies may suffer from aggregation bias, in this paper we use disaggregated trade data at commodity level from 77 industries that trade between Pakistan and EU. While we find short-run significant effects in 22 industries, these effects do not last into the long run in most industries. Most of the affected industries are found to be small, as measured by their trade shares.

Suggested Citation

  • Bahmani-Oskooee Mohsen & Iqbal Javed & Muzammil Muhammad, 2017. "Pakistan-EU Commodity Trade: Is there Evidence of J-Curve Effect?," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-8, June.
    • Handle: RePEc:bpj:glecon:v:13:y:2017:i:1:p:8:n:5
    DOI: 10.1515/gej-2016-0067
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    Cited by:

    1. Trofimov, Ivan D., 2020. "Real Exchange Rate and the Dynamics of Services Trade Balance in the UK: A Linear and Non-linear ARDL Analysis," MPRA Paper 106703, University Library of Munich, Germany.
    2. Salahuddin & Javed Iqbal & Misbah Nosheen, 2020. "Economic & Cultural Distance & Regional Integration: Evidence from Gravity Model Using Disaggregated Data for Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 59(2), pages 243-274.
    3. Mohsen Bahmani-Oskooee & Ahmed Usman & Sana Ullah, 2020. "Asymmetric J-curve in the commodity trade between Pakistan and United States: evidence from 41 industries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 10(2), pages 163-188, June.
    4. David Fadiran & Hammed Amusa, 2019. "The J–Curve Phenomenon: Evidence from Commodity Trade Between South Africa and the United States," Working Papers 777, Economic Research Southern Africa.
    5. Shengliang Zhao & Lixin Liu, 2023. "Novel evidence on the asymmetric J‐curve in the commodity trade between Korea and China: evidence from 75 industries," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(2), pages 142-164, November.

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    More about this item

    Keywords

    J-Curve; bound testing; commodity trade; Pakistan; EU;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange

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