Asian Financial Crisis and the J-Curve: Evidence from South Korea
AbstractUsing an error correction version of an autoregressive distributed lag model, we investigate the dynamics of the Korean J-Curve against her eight trading partners. The strict version of the J-Curve is observed with a few major Korean trading partners, such as the U.S. and Indonesia. The estimation results from the Trade Balance Model and the Error Correction Model confirm that, after a depreciation of the Korean won, there has been a long-run adjustment toward the improvement of Korean trade balance against most trading partners. The findings are consistent over different sample periods, including before and after the financial crisis in 1997, and with different trading partners. After the Asian financial crisis, we find that the J-Curve relationship with Korean trading partners has become much more apparent than it was before the crisis.
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Bibliographic InfoPaper provided by Saint Cloud State University, Department of Economics in its series Working Papers with number 2007-1.
Date of creation: Jul 2007
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Bilateral Trade; J-Curve; Currency Crisis;
Find related papers by JEL classification:
- F1 - International Economics - - Trade
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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