IDEAS home Printed from https://ideas.repec.org/a/eee/ecosys/v32y2008i2p129-141.html
   My bibliography  Save this article

Exchange rate sensitivity of US bilateral trade flows

Author

Listed:
  • Bahmani-Oskooee, Mohsen
  • Ratha, Artatrana

Abstract

The traditional way of assessing the impact of currency depreciation on the trade balance has been to estimate the elasticity of trade volume to relative prices. To this end, most previous studies used aggregate trade data. To avoid aggregation biases potentially hidden in aggregate data, recent studies have relied on bilateral trade data. Since import and export price data is not available on bilateral level, this study proposes an alternative way of assessing the impact of currency depreciation on bilateral trade flows. The models are applied between the US and her 19 industrial trading partners using recent advances in time-series modeling.

Suggested Citation

  • Bahmani-Oskooee, Mohsen & Ratha, Artatrana, 2008. "Exchange rate sensitivity of US bilateral trade flows," Economic Systems, Elsevier, vol. 32(2), pages 129-141, June.
  • Handle: RePEc:eee:ecosys:v:32:y:2008:i:2:p:129-141
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0939-3625(08)00004-6
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Frank W. Agbola & Maylene Y. Damoense, 2005. "Time-series estimation of import demand functions for pulses in India," Journal of Economic Studies, Emerald Group Publishing, vol. 32(2), pages 146-157, May.
    2. Eaton Jonathan & Tamura Akiko, 1994. "Bilateralism and Regionalism in Japanese and U.S. Trade and Direct Foreign Investment Patterns," Journal of the Japanese and International Economies, Elsevier, vol. 8(4), pages 478-510, December.
    3. Nadenichek, Jon, 2000. "The Japan-US trade imbalance: a real business cycle perspective," Japan and the World Economy, Elsevier, vol. 12(3), pages 255-271, September.
    4. Cushman, David O., 1987. "U.S. bilateral trade balances and the dollar," Economics Letters, Elsevier, vol. 24(4), pages 363-367.
    5. Bahmani-Oskooee, Mohsen & Niroomand, Farhang, 1998. "Long-run price elasticities and the Marshall-Lerner condition revisited," Economics Letters, Elsevier, vol. 61(1), pages 101-109, October.
    6. Noel D. Uri & Roy Boyd, 1994. "The Impact of the Tariff-Rate Quota on Sugar Imports on the US Economy," Journal of Economic Studies, Emerald Group Publishing, vol. 21(1), pages 16-40, January.
    7. Mohsen Bahmani-Oskooee & Claire Economidou & Gour Gobinda Goswami, 2005. "How sensitive are Britain's inpayments and outpayments to the value of the British pound," Journal of Economic Studies, Emerald Group Publishing, vol. 32(5), pages 455-467, October.
    8. Mohsen Bahmani-Oskooee & Artatrana Ratha, 2004. "The J-Curve: a literature review," Applied Economics, Taylor & Francis Journals, vol. 36(13), pages 1377-1398.
    9. Augustine C. Arize, 2001. "Traditional export demand relation and parameter instability: An empirical investigation," Journal of Economic Studies, Emerald Group Publishing, vol. 28(6), pages 378-396, October.
    10. Lila J. Truett & Dale B. Truett, 2000. "The demand for imports and economic reform in Spain," Journal of Economic Studies, Emerald Group Publishing, vol. 27(3), pages 182-199, September.
    11. Irandoust, Manuchehr & Ekblad, Kristin & Parmler, Johan, 2006. "Bilateral trade flows and exchange rate sensitivity: Evidence from likelihood-based panel cointegration," Economic Systems, Elsevier, vol. 30(2), pages 170-183, June.
    12. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    13. Seema Narayan & Paresh Kumar Narayan, 2005. "An empirical analysis of Fiji's import demand function," Journal of Economic Studies, Emerald Group Publishing, vol. 32(2), pages 158-168, May.
    14. Marquez, Jaime, 1990. "Bilateral Trade Elasticities," The Review of Economics and Statistics, MIT Press, vol. 72(1), pages 70-77, February.
    15. Bahmani-Oskooee, Mohsen & Goswami, Gour Gobinda, 2004. "Exchange rate sensitivity of Japan's bilateral trade flows," Japan and the World Economy, Elsevier, vol. 16(1), pages 1-15, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Delavari, Majid & Baranpour, Naghmeh & Abdeshahi, Abbas, 2014. "Analyzing the Effect of Real Exchange Rate on Petrochemicals Exporting," MPRA Paper 60360, University Library of Munich, Germany.
    2. repec:ecb:ecbwps:20141801 is not listed on IDEAS
    3. Ihsan Bozok & Bahar Sen Dogan & Caglar Yunculer, 2015. "Estimating Income and Price Elasticity of Turkish Exports with Heterogeneous Panel Time-Series Methods," Working Papers 1526, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    4. Natalya Ketenci & Idil Uz, 2011. "Bilateral and regional trade elasticities of the EU," Empirical Economics, Springer, vol. 40(3), pages 839-854, May.
    5. Ibarra, Carlos A., 2011. "Import elasticities and the external constraint in Mexico," Economic Systems, Elsevier, vol. 35(3), pages 363-377, September.
    6. Yoichi Matsubayashi & Shigeyuki Hamori, 2009. "Empirical analysis of import demand behavior of least developed countries," Economics Bulletin, AccessEcon, vol. 29(2), pages 1443-1458.
    7. Mohsen Bahmani-Oskooee & Magda Kandil, 2010. "Exchange Rate Fluctuations and Output in Oil-Producing Countries: The Case of Iran," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(3), pages 23-45, May.
    8. Stephen Devadoss & Amy Hilland & Ron Mittelhammer & John Foltz, 2014. "The effects of the Yuan-dollar exchange rate on agricultural commodity trade between the United States, China, and their competitors," Agricultural Economics, International Association of Agricultural Economists, vol. 45(S1), pages 23-37, November.
    9. 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.
    10. Mohsen Bahmani-Oskooee & Ida A. Mirzaie & Ilir Miteza, 2007. "Sectoral Employment, Wages and the Exchange Rate: Evidence from the U.S," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 125-136, Winter.
    11. Mohsen Bahmani-Oskooee & Rajarshi Mitra, 2008. "Exchange Rate Risk and Commodity Trade Between the U.S. and India," Open Economies Review, Springer, vol. 19(1), pages 71-80, February.
    12. Ketenci, Natalya, 2014. "The bilateral trade balance of the EU in the presence of structural breaks," MPRA Paper 54661, University Library of Munich, Germany.
    13. Ketenci, Natalya, 2013. "The effect of global financial crisis on trade elasticities: Evidence from BRIICS countries and Turkey," MPRA Paper 54659, University Library of Munich, Germany.
    14. di Mauro, Filippo & Demian, Calin-Vlad, 2015. "The exchange rate, asymmetric shocks and asymmetric distributions," Working Paper Series 1801, European Central Bank.
    15. Mohsen Bahmani-Oskooee & Ruixin Zhang, 2015. "Koreas Inpayments and Outpayments with the Rest of the World: Is There Room for Currency Manipulation?," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 5(1), pages 12-32, January.
    16. Cortes, Maria, 2007. "Examining Patterns of Bilateral Trade between Australia and Colombia by Using Cointegration Analysis and Error-Correction Models," Economics Working Papers wp07-20, School of Economics, University of Wollongong, NSW, Australia.
    17. 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.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecosys:v:32:y:2008:i:2:p:129-141. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://edirc.repec.org/data/osteide.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.