Impact of Devaluation on Trade Balance in Pakistan
The purpose of this paper is to find the impact of devaluation on trade balance in Pakistan in both long and short run using bound testing approach to Cointegration and Error Correction Mechanism (ECM). The result shows that devaluation is effective in improving trade balance and there is a cointegrated relationship between the real effective exchange rate and trade balance in the long run.
Volume (Year): 3 (2011)
Issue (Month): 3 (July)
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- Upadhyaya, Kamal P., 1999. "Currency devaluation, aggregate output, and the long run: an empirical study," Economics Letters, Elsevier, vol. 64(2), pages 197-202, August.
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