The Long-run and Short-run Impact of Exchange Rate Devaluation on Pakistan's Trade Performance
In estimating trade elasticities for Pakistan, most previous researchers have employed non-stationary data and OLS or 2SLS techniques. In this paper we use Johansen’s cointegration methodology to re-investigate the long-run trade elasticities and existence of the Marshall-Lerner condition. Using quarterly data, the trade performance with Pakistan’s ten major trading partners is empirically tested. Moreover, we also investigate the short-run exchange rate dynamics by constructing an error-corrrection model to trace the j-curve.
Volume (Year): 41 (2002)
Issue (Month): 3 ()
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- Bahmani-Oskooee, Mohsen & Malixi, Margaret, 1992. "More evidence on the J curve from LDCs," Journal of Policy Modeling, Elsevier, vol. 14(5), pages 641-653, October.
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- Haynes, Stephen E & Stone, Joe A, 1982. "Impact of the Terms of Trade on the U.S. Trade Balance: A Reexamination," The Review of Economics and Statistics, MIT Press, vol. 64(4), pages 702-06, November.
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