The dancing of the real exchange rate of US dollar and the US real trade balance
AbstractThe current study seeks to re-examine a possible long-run dynamic relationship between the trade-weighted real exchange rate of US dollar and US real trade balance by using the well-known cointegration methodology. The sample period includes observations from the second quarter of 1973 through the second quarter of 1992. The unit root test reveals that the trade-weighted real exchange value of dollar and the US real trade balance are individually nonstationary in levels. The ADF test concludes that there is no systematic long-run association between these two variables even under the flexible exchange rate system.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 3 (1996)
Issue (Month): 12 ()
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- Khim-sen Liew & Kian-Ping Lim & Huzaimi Hussain, 2003. "Exchange Rate and Trade Balance Relationship: The Experience of ASEAN Countries," International Trade 0307003, EconWPA.
- Waliullah & Mehmood Khan Kakar & Rehmatullah Kakar & Wakeel Khan, 2010. "The Determinants of Pakistan’s Trade Balance: An ARDL Cointegration Approach," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(1), pages 1-26, Jan-Jun.
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