The J-curve and NAFTA: evidence from commodity trade between the US and Mexico
AbstractThe North American Free Trade Agreement (NAFTA) was predicted to have a substantial impact on the US-Mexico trade, especially on specific importing and exporting industries. In this article, we use annual industry-level export and import data from 1962 to 2004 to discern both the short- and long-run effects of real exchange-rate depreciation on the Mexico-US trade balance, as well as the effects of NAFTA on this trade. We find that peso depreciation has a positive long-run effect on 24 of 102 Mexican industries and a negative short-run effect on 19 of 102 industries. Only a small fraction (7 of 102 industries) show any support for the J-curve hypothesis. NAFTA has had a significant effect on a significant number of the industries, however.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics.
Volume (Year): 43 (2011)
Issue (Month): 13 ()
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- Mohsen Bahmani-Oskooee & Scott W. Hegerty, 2010. "The J- and S-curves: a survey of the recent literature," Journal of Economic Studies, Emerald Group Publishing, vol. 37(6), pages 580-596, September.
- Mohsen Bahmani-Oskooee & Hanafiah Harvey & Scott Hegerty, 2013. "Currency fluctuations and the French–U.S. trade balance: evidence from 118 industries," Empirica, Springer, vol. 40(2), pages 237-257, May.
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