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The J-Curve: Evidence from East Asia

Author

Listed:
  • Lal, Anil K.

    () (Pittsburg State University Pittsburg)

  • Lowinger, Thomas C.

    (Washington State University Pullman)

Abstract

This paper examines the determinants of trade balances of seven East Asian countries, using cointegration technique, error correction model, and impulse response function. Among other things, our investigation confirms the existence of J-curve effect and the results show that there are significant differences in the duration and the extent of the J-curve effect across countries. Several explanations consistent with those findings are advanced in the paper, including differences in exchange rate and trade regimes across sample countries. It is likely that liberalization of an exchange rate regime coupled with liberalization of trade may act to dampen the J-curve effect.

Suggested Citation

  • Lal, Anil K. & Lowinger, Thomas C., 2002. "The J-Curve: Evidence from East Asia," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 397-415.
  • Handle: RePEc:ris:integr:0201
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    Citations

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    Cited by:

    1. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2014. "U.S.-Singapore Commodity Trade and the J-Curve," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(10), pages 1473-1484, October.
    2. Ivrendi, Mehmet & Yildirim, Zekeriya, 2013. "Monetary policy shocks and macroeconomic variables: Evidence from fast growing emerging economies," Economics Discussion Papers 2013-61, Kiel Institute for the World Economy (IfW).
    3. Hsing Yu, 2008. "A Study of the J-Curve for Seven Selected Latin American Countries," Global Economy Journal, De Gruyter, vol. 8(4), pages 1-14, December.
    4. Artatrana Ratha & Eungmin Kang, 2014. "Asian Financial Crisis And Korean Trade Dynamics," Contemporary Economic Policy, Western Economic Association International, vol. 32(4), pages 862-877, October.
    5. Hsing, Yu, 2009. "Test of the J-curve for the DR-CAFTA countries and policy implications," Research in International Business and Finance, Elsevier, vol. 23(3), pages 293-301, September.
    6. Bahmani-Oskooee, Mohsen & Aftab, Muhammad, 2017. "Asymmetric effects of exchange rate changes on the Malaysia-China commodity trade," MPRA Paper 83024, University Library of Munich, Germany, revised 16 Mar 2017.
    7. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2012. "J-Curve: Singapore versus her Major Trading Partners," Economic Papers, The Economic Society of Australia, vol. 31(4), pages 515-522, December.
    8. Guglielmo Maria Caporale & Rodrigo Costamagna & Gustavo Rossini, 2016. "Competitive Devaluations in Commodity-Based Economies: Colombia and the Pacific Alliance Group," CESifo Working Paper Series 5907, CESifo Group Munich.
    9. repec:bla:econpa:v:36:y:2017:i:2:p:198-222 is not listed on IDEAS
    10. Yannick Bineau, 2016. "Real exchange rate and bilateral trade balance of Cambodia: A panel investigation," Economics Bulletin, AccessEcon, vol. 36(2), pages 895-900.
    11. Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2012. "How responsive are Indonesia's bilateral inpayments and outpayments to real depreciation of Rupiah?," Studies in Economics and Finance, Emerald Group Publishing, vol. 29(2), pages 133-143, June.
    12. repec:agr:journl:v:1(614):y:2018:i:1(614):p:73-94 is not listed on IDEAS
    13. Bahmani-Oskooee, Mohsen & Baek, Jungho, 2016. "Do exchange rate changes have symmetric or asymmetric effects on the trade balance? Evidence from U.S.–Korea commodity trade," Journal of Asian Economics, Elsevier, vol. 45(C), pages 15-30.
    14. Abdorreza Soleymani & Soo Y. Chua & Hamat Che Abdul Fatah, 2016. "The Effects of Currency Depreciation on Industry Trade Flows between Malaysia and China," The International Trade Journal, Taylor & Francis Journals, vol. 30(3), pages 181-206, May.
    15. Huseyin Kalyoncu & Ilhan Ozturk & Seyfettin Artan & Kahraman Kalyoncu, 2009. "Devaluation and trade balance in Latin American countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 27(1), pages 115-128.
    16. Bahmani-Oskooee, Mohsen & Satawatananon, Kaveepot, 2010. "US-Thailand trade at the commodity level and the role of the real exchange rate," Journal of Asian Economics, Elsevier, vol. 21(6), pages 514-525, December.
    17. repec:agr:journl:v:xxiv:y:2017:i:2(611):p:221-236 is not listed on IDEAS
    18. repec:bla:rdevec:v:21:y:2017:i:4:p:e30-e46 is not listed on IDEAS
    19. Bahmani-Oskooee, Mohsen & Baek, Jungho, 2016. "Asymmetry cointegration and the J-curve: New evidence from Korean bilateral trade balance models with her 14 partners," MPRA Paper 83195, University Library of Munich, Germany, revised 15 Mar 2016.
    20. BAHMANI-OSKOOEE, Mohsen & Aftab, Muhammad, 2017. "Malaysia-Japan Commodity Trade and Asymmetric Effects of Exchange Rate Changes," MPRA Paper 81213, University Library of Munich, Germany, revised 18 Aug 2017.
    21. Yazici, Mehmet & Qamarul Islam, M., 2012. "Exchange Rate and Turkish Agricultural Trade Balance with EU," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(2), June.

    More about this item

    Keywords

    trade; economic development;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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