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The S-curve Dynamics of US Bilateral Trade

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  • Mohsen Bahmani-Oskooee
  • Artatrana Ratha

Abstract

A few studies in dynamic general-equilibrium setting have argued that the trade balance is negatively correlated with current and future movements in the terms of trade but positively correlated with past movements, hence the S-curve phenomenon. Using aggregate trade data and the terms of trade has not provided strong empirical counterpart. However, in this paper, when we disaggregate the trade data between the US and her trading partners we find stronger results in support of the S-curve. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Artatrana Ratha, 2007. "The S-curve Dynamics of US Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 430-439, May.
  • Handle: RePEc:bla:reviec:v:15:y:2007:i:2:p:430-439
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    Citations

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    Cited by:

    1. Gour Gobinda Goswami & Sadaquat Junayed, 2006. "Pooled Mean Group Estimation of the Bilateral Trade Balance Equation: USA vis-a-vis her Trading Partners," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(4), pages 515-526.
    2. Jamilov, Rustam, 2012. "Is There a J-curve for Azerbaijan? Evidence from Industry-Level Analysis," MPRA Paper 39370, University Library of Munich, Germany.
    3. Mohsen Bahmani-Oskooee & Altin Tanku, 2006. "Do the black market and the official exchange rates converge in the long run?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 30(1), pages 57-69, March.
    4. Rustam Jamilov, 2013. "J-Curve Dynamics and the Marshall–Lerner Condition: Evidence from Azerbaijan," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), pages 313-323.
    5. Mohsen Bahmani-Oskooee & Marzieh Bolhasani, 2008. "The J-Curve: Evidence from commodity trade between Canada and the U.S," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 32(3), pages 207-225, July.
    6. Mohsen Bahmani-oskooee & Hadise Fariditavana, 2014. "Do Exchange Rate Changes have Symmetric Effect on the S-Curve?," Economics Bulletin, AccessEcon, vol. 34(1), pages 164-173.
    7. Kyophilavong, Phouphet & Shahbaz, Muhammad & Uddin, Gazi Salah, 2013. "Does J-curve phenomenon exist in case of Laos? An ARDL approach," Economic Modelling, Elsevier, pages 833-839.
    8. Ferda Halicioglu, 2008. "The J-curve dynamics of Turkey: an application of ARDL model," Applied Economics, Taylor & Francis Journals, vol. 40(18), pages 2423-2429.
    9. Huiran Pan, 2013. "Asset Revaluation And Trade Balance Under Liability Dollarization: The Case Of South Korea," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(3), pages 1-32, September.
    10. Jamilov, Rustam, 2011. "J-Curve Dynamics and the Marshall-Lerner Condition: Evidence from Azerbaijan," MPRA Paper 36799, University Library of Munich, Germany, revised Feb 2012.
    11. Amit Ghosh, 2012. "Is there an S-curve relationship between U.S. trade balance and terms of trade? An analysis across industries and countries," Economics Bulletin, AccessEcon, vol. 32(1), pages 325-337.
    12. Kanchana Senanayake Amarasingha Appuhamilage, 2010. "Exchange rate movements' effect on Sri Lanka-China trade," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 3(3), pages 254-267, October.
    13. Halicioglu, Ferda, 2008. "The bilateral J-curve: Turkey versus her 13 trading partners," Journal of Asian Economics, Elsevier, pages 236-243.
    14. Mohsen Bahmani-Oskooee & Dan Xi, 2012. "China-Germany commodity trade and the S-curve," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 5(1), pages 20-28, February.
    15. Mohsen Bahmani-Oskooee & Marzieh Bolhasani, 2011. "How Sensitive is U.S.-Canadian Trade to the Exchange Rate: Evidence from Industry Data," Open Economies Review, Springer, pages 53-91.
    16. Dmitriev, Alexandre & Roberts, Ivan, 2013. "The cost of adjustment: On comovement between the trade balance and the terms of trade," Economic Modelling, Elsevier, vol. 35(C), pages 689-700.
    17. Bahmani-Oskooee, Mohsen & Ratha, Artatrana, 2010. "S-Curve dynamics of trade between U.S. and China," China Economic Review, Elsevier, vol. 21(2), pages 212-223, June.
    18. Rustam Jamilov, 2013. "J-Curve Dynamics and the Marshall–Lerner Condition: Evidence from Azerbaijan," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), pages 313-323.
    19. Dmitriev, Alexandre, 2017. "Composite habits and international transmission of business cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 76(C), pages 1-34.
    20. Mohsen Bahmani-Oskooee & Dan Xi, 2015. "A note on the S-curve dynamics of commodity trade between Brazil and the United States," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., pages 79-94.
    21. Bahmani-Oskooee, Mohsen & Ratha, Artatrana, 2011. "S-curve dynamics of trade between Sweden and her trading partners," Economic Systems, Elsevier, vol. 35(3), pages 355-362, September.
    22. Kimbugwe, Hassan, 2006. "The bilateral J-Curve hypothesis between Turkey and her 9 trading partners," MPRA Paper 4254, University Library of Munich, Germany.

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