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Bilateral J-Curves between Pakistan and Her Trading Partners


  • Zehra Aftab


  • Sajawal Khan


Earlier studies that investigated the J-Curve phenomenon for Pakistan employed aggregate trade data. These studies suffered from the aggregation bias problem. In order to overcome this constraint, this paper tests the effects of real exchange rate depreciation in the Pakistani Rupee on the bilateral trade balance between Pakistan and her 12 respective trade partners. These countries, together, account for almost half of Pakistans total trade. In order to differentiate between the long-run equilibrium and short-run disequilibrium dynamics, and also to deal with non-stationary data, the ARDL approach isused. The results do not provide any support for the standard J-curve phenomenon.

Suggested Citation

  • Zehra Aftab & Sajawal Khan, 2008. "Bilateral J-Curves between Pakistan and Her Trading Partners," Trade Working Papers 22179, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22179

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    References listed on IDEAS

    1. Rose, Andrew K. & Yellen, Janet L., 1989. "Is there a J-curve?," Journal of Monetary Economics, Elsevier, vol. 24(1), pages 53-68, July.
    2. Swarnjit Arora & Mohsen Bahmani-Oskooee & Gour Goswami, 2003. "Bilateral J-curve between India and her trading partners," Applied Economics, Taylor & Francis Journals, vol. 35(9), pages 1037-1041.
    3. Stephen P. Magee, 1973. "Currency Contracts, Pass-Through, and Devaluation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(1), pages 303-325.
    4. Rose, Andrew K., 1991. "The role of exchange rates in a popular model of international trade : Does the 'Marshall-Lerner' condition hold?," Journal of International Economics, Elsevier, vol. 30(3-4), pages 301-316, May.
    5. Rose, Andrew K., 1990. "Exchange rates and the trade balance : Some evidence from developing countries," Economics Letters, Elsevier, vol. 34(3), pages 271-275, November.
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    1. repec:ksp:journ2:v:4:y:2017:i:1:p:75-85 is not listed on IDEAS
    2. repec:bpj:glecon:v:13:y:2017:i:1:p:8:n:5 is not listed on IDEAS
    3. Bahmani-Oskooee Mohsen & Iqbal Javed & Muzammil Muhammad, 2017. "Pakistan-EU Commodity Trade: Is there Evidence of J-Curve Effect?," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-8, June.
    4. repec:pje:journl:article27sumviii is not listed on IDEAS

    More about this item


    J-Curve; Trade Balance; Marshall-Lerner Condition;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange


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