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Does J-Curve Phenomenon Exist in Case of Laos? An ARDL Approach

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  • Kyophilavong, Phouphet
  • Shahbaz, Muhammad
  • Salah Uddin, Gazi

Abstract

This study aims to test the existence of J-curve phenomenon in Laos economy using quarterly data over the period of 1993-2010. The ARDL bounds testing approach to cointegration is used to examine short run as well as long run impact of real depreciation of Lao kip on Lao trade balance. The empirical results suggest that there is J-curve effect in case of Laos. The impact of real depreciation of the Lao kip on Lao trade balance is insignificant in long run. In short-run, real depreciation has inverse impact on Lao’s trade balance. The long-run trade balance is determined by domestic income.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 48084.

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Date of creation: 12 May 2013
Date of revision: 04 Jul 2013
Handle: RePEc:pra:mprapa:48084

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Keywords: J-curve; ARDL approach; Laos;

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