IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/36799.html
   My bibliography  Save this paper

J-Curve Dynamics and the Marshall-Lerner Condition: Evidence from Azerbaijan

Author

Listed:
  • Jamilov, Rustam

Abstract

This paper seeks empirical evidence for the J-curve and the Marshal-Lerner condition for Azerbaijan. The results suggest that a real depreciation of the Azerbaijani Manat would cause a decline in the balance of trade in the short-run and an increase in the long-run. When including the prices of exports and imports into the analysis, the robustness test shows that the terms of trade ratio diminishes following the devaluation and does not return to its pre-depreciation level in the long-run, while the balance of trade continues to improve. This points at the presence of an underlying volume effect as the key driver of the trade balance growth. Overall, the results of this study suggest a fulfillment of the Marshall-Lerner condition criteria, indicate the existence of the J-curve, and the price and volume effects.

Suggested Citation

  • Jamilov, Rustam, 2011. "J-Curve Dynamics and the Marshall-Lerner Condition: Evidence from Azerbaijan," MPRA Paper 36799, University Library of Munich, Germany, revised Feb 2012.
  • Handle: RePEc:pra:mprapa:36799
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/36799/1/MPRA_paper_36799.pdf
    File Function: original version
    Download Restriction: no

    File URL: https://mpra.ub.uni-muenchen.de/39272/2/MPRA_paper_39272.pdf
    File Function: revised version
    Download Restriction: no

    References listed on IDEAS

    as
    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. Sergio Da Silva & Guilherme Moura, 2005. "Is There a Brazilian J-Curve?," Economics Bulletin, AccessEcon, vol. 6(10), pages 1-17.
    3. Gupta-Kapoor Anju & Ramakrishnan Uma, 1999. "Is There A J-Curve? A New Estimation for Japan," International Economic Journal, Taylor & Francis Journals, vol. 13(4), pages 71-79.
    4. Mohsen Bahmani-Oskooee & Janardhanan Alse, 1994. "Short-Run versus Long-Run Effects of Devaluation: Error-Correction Modeling and Cointegration," Eastern Economic Journal, Eastern Economic Association, vol. 20(4), pages 453-464, Fall.
    5. Mohsen Bahmani-Oskooee & Charikleia Economidou & Gour Goswami, 2006. "Bilateral J-curve between the UK vis-a-vis her major trading partners," Applied Economics, Taylor & Francis Journals, vol. 38(8), pages 879-888.
    6. repec:ebl:ecbull:v:5:y:2003:i:18:p:1-13 is not listed on IDEAS
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. repec:ebl:ecbull:v:6:y:2005:i:10:p:1-17 is not listed on IDEAS
    9. Mohsen Bahmani-Oskooee & Artatrana Ratha, 2007. "The S-curve Dynamics of US Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 430-439, May.
    10. R. Scott Hacker & Abdulnasser Hatemi-J, 2004. "The effect of exchange rate changes on trade balances in the short and long run," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(4), pages 777-799, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peguero, Anadel G. & Cruz-Rodríguez, Alexis, 2016. "Condición Marshall-Lerner y el efecto Curva J: Evidencias para la República Dominicana
      [Marshall-Lerner Condition and J-Curve Effect: Evidence for the Dominican Republic]
      ," MPRA Paper 71535, University Library of Munich, Germany.
    2. Jamilov, Rustam, 2012. "Channels of Monetary Transmission in the CIS," MPRA Paper 39568, University Library of Munich, Germany.
    3. Jamilov, Rustam, 2012. "Is There a J-curve for Azerbaijan? Evidence from Industry-Level Analysis," MPRA Paper 39370, University Library of Munich, Germany.
    4. Mohsen Bahmani-Oskooee & Rustam Jamilov, 2014. "Export diversification and the S-curve effect in a resource-rich state: evidence from Azerbaijan," Economic Change and Restructuring, Springer, vol. 47(2), pages 135-154, May.
    5. repec:psl:pslqrr:2017:24 is not listed on IDEAS

    More about this item

    Keywords

    Marshall-Lerner condition; Azerbaijan; J-curve; real depreciation; Manat; export and import price;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:36799. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter) or (Rebekah McClure). General contact details of provider: http://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.