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Asymmetric Exchange Rate Effects on Brazilian Trade Balance

Author

Listed:
  • Antonio Clecio de Brito
  • Elano Ferreira Arruda
  • Cristiano da Costa da Silva

Abstract

The study examines the asymmetric impact of the real exchange rate on the trade balance of Brazilian states, considering industry sectors classified by technological intensity (CIT), namely high technology, medium-high technology, medium-low technology, and low technology, with a special focus on the validity of the J-curve and Marshall-Lerner Condition phenomena. The analysis was based on the Pooled Mean Group estimator for a nonlinear autoregressive framework with distributed lag in a panel setting (PNARDL-PMG), using annual data for the 26 Brazilian states from 2000 to 2020. The findings show that the response of states’ trade balance by CIT is asymmetric and statistically significant, regarding long-term exchange rate variations. Moreover, while the impact of positive changes (real depreciations) in the exchange rate benefits the trade balance of Brazilian states, regardless of the technological intensity classification considered, the impact of negative changes (negative variations) in the exchange rate benefits the balance for high technological intensity sectors, as well as low technological intensity sectors.

Suggested Citation

  • Antonio Clecio de Brito & Elano Ferreira Arruda & Cristiano da Costa da Silva, 2026. "Asymmetric Exchange Rate Effects on Brazilian Trade Balance," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 18(9), pages 1-46, September.
    • Handle: RePEc:ibn:ijefaa:v:18:y:2026:i:9:p:46
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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