Estimation of the J-Curve in China
AbstractThis paper investigates whether a J-curve can be detected in the time series data on China's bilateral trade with the G-7 countries. It utilizes cointegration and causality tests to ascertain the long-run relatedness, and the short-run dynamics, between the real exchange rate, national income, and the trade balance. There is some evidence that a real depreciation eventually improves the trade balance with some countries. But there is no indication of a negative short-run response which characteristics the J-Curve.
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Bibliographic InfoPaper provided by East-West Center, Economics Study Area in its series Economics Study Area Working Papers with number 67.
Length: 22 pages
Date of creation: Mar 2004
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
- NEP-IFN-2005-04-16 (International Finance)
- NEP-SEA-2005-04-16 (South East Asia)
- NEP-TRA-2005-04-16 (Transition Economics)
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- Chan, Tze-Haw & Hooy, Chee-Wooi, 2010. "China-Malaysia’s Trading and Exchange Rate: Complementary or Conflicting Features?," MPRA Paper 25546, University Library of Munich, Germany.
- Chan, Tze-Haw & Hooy, Chee-Wooi, 2011. "China-Malaysia’s long run trading and exchange rate: complementary or conflicting?," MPRA Paper 33585, University Library of Munich, Germany.
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