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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- Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Hegerty, Scott, 2013. "Currency depreciations and the U.S.–Italian trade balance: Industry-level estimates," Research in Economics, Elsevier, vol. 67(3), pages 215-225.
- Bahmani-Oskooee, Mohsen & Harvey, Hanafiah & Hegerty, Scott W., 2014. "Industry trade and exchange-rate fluctuations: Evidence from the U.S. and Chile," International Review of Economics & Finance, Elsevier, vol. 29(C), pages 619-626.
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