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THE J-CURVE AT THE INDUSTRY LEVEL: EVIDENCE FROM TRADE BETWEEN THE US AND AUSTRALIA.
- Source :
- Australian Economic Papers; Dec2007, Vol. 46 Issue 4, p315-328, 14p, 2 Charts
- Publication Year :
- 2007
-
Abstract
- Previous studies that tested the J-curve phenomenon for Australia used trade data either between Australia and the rest of the world or between Australia and its trading partners on a bilateral basis. They were unable to find support for the J-curve in the short run nor any significant relation between the trade balance and the exchange rate in the long run. In this paper we disaggregate the data between Australia and its second largest trading partner, the US, and consider the trade between 108 industries. Using annual data over the 1962–2003 period and bounds testing approach to cointegration and error-correction modelling, we are able to discover short-run effects of currency depreciation on the trade balance in 64 industries. The long-run and positive effects were only evidenced in 35 cases, supporting the J-curve. [ABSTRACT FROM AUTHOR]
- Subjects :
- BALANCE of trade
INDUSTRIES
MATHEMATICAL models
INTERNATIONAL economic relations
Subjects
Details
- Language :
- English
- ISSN :
- 0004900X
- Volume :
- 46
- Issue :
- 4
- Database :
- Complementary Index
- Journal :
- Australian Economic Papers
- Publication Type :
- Academic Journal
- Accession number :
- 27974402
- Full Text :
- https://doi.org/10.1111/j.1467-8454.2007.00322.x