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Kazakhstan trade with its partners and the role of tenge: an asymmetric analysis

Author

Listed:
  • Mohsen Bahmani-Oskooee

    (The University of Wisconsin-Milwaukee)

  • Hanafiah Harvey

    (Pennsylvania State University, Mont Alto)

  • Amr Hosny

    (International Monetary Fund)

Abstract

Previous research has shown that lack of any short-run and long-run relationship between the trade balance and the exchange rate could be due to ignoring non-linear adjustment of the exchange rate. In this paper, we introduce non-linearity of the exchange rate adjustment and consider the asymmetric response of Kazakhstan’s trade balance with each of its 13 trading partners. While we find short-run asymmetric response in almost all 13 models, short-run asymmetric effects translate into the long run only in the trade with Austria, China, France, and the U.S. Only in the trade with France a tenge depreciation had favorable long-run effects.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Hanafiah Harvey & Amr Hosny, 2019. "Kazakhstan trade with its partners and the role of tenge: an asymmetric analysis," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(4), pages 493-513, December.
  • Handle: RePEc:spr:eurase:v:9:y:2019:i:4:d:10.1007_s40822-018-0116-2
    DOI: 10.1007/s40822-018-0116-2
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