There exits two groups of studies that have investigated the short-run and the long-run effects of currency depreciation on the trade balance. The first group has employed trade data at the aggregate level between one country and the rest of the world. The second group has used trade data at the bilateral level between one country and her major trading partners. Both groups have provided mixed conclusions. In this paper we employ import and export data at industry level. Sixty six industries in the U.S. (SITC Commodity Groupings) have been identified for which monthly data over the January 1991-August 2002 period are used in investigating the short-run and the long-run effects of real depreciation of the dollar. The results reveal evidence of the J-Curve effect only in six industries. However, the long-run favorable effect of real depreciation is supported in 22 industries
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Article provided by Economics Bulletin in its journal Economics Bulletin.
Volume (Year): 6 (2007) Issue (Month): 26 () Pages: 1-12 Download reference. The following formats are available: HTML,
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Handle: RePEc:ebl:ecbull:v:6:y:2007:i:26:p:1-12
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