U.S.-Africa trade balance and the J-curve: An asymmetry analysis

This paper investigates the relationship between trade balance, real exchange rates, and incomes in Tunisia by adopting the autoregressive distributed model (ARDL) by using data over the period of 1980 to 2018. We also used the bound test cointegration between variables at a 10% significant level. Our findings show that the Tunisia economy does not match the Marshall-Lerner condition in the long run, that provides an accurate description of the particular situation for which a country currency devaluation or depreciation its currency under both fixed or floating regime is predicted to enhance the trade balance of a country, which means there is no j-curve phenomenon in the long run, which tries to differentiate between the change of short-run and long-run effects in the change of exchange rate on the trade balance. Our findings match the Marshall-Lerner condition in the short run and can confirm the existing j-curve in the case of Tunisia.

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Estimation of the J-Curve: An Empirical Analysis Based on the Trade Balance between Australia and China

International Journal of Trade Economics and Finance ◽

10.18178/ijtef.2018.9.2.594 ◽

2018 ◽

Vol 9 (2) ◽

pp. 88-95

Author(s):

Sihong Wu ◽

Keyword(s):

Empirical Analysis ◽

Trade Balance ◽

J Curve

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The J‐Curve Effect and the U.S. Agricultural Trade Balance

American Journal of Agricultural Economics ◽

10.2307/1242027 ◽

1989 ◽

Vol 71 (3) ◽

pp. 712-720 ◽

Cited By ~ 18

Author(s):

Colin A. Carter ◽

Daniel H. Pick

Keyword(s):

Trade Balance ◽

Agricultural Trade ◽

J Curve ◽

Curve Effect ◽

The U.S

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Foreign Demand, Investment And Trade Balance: The Case Of Australia

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v1i4.2998 ◽

2011 ◽

Vol 1 (4) ◽

Cited By ~ 1

Author(s):

Jean-Francois Hoarau ◽

Alain Nurbel ◽

Nelson Latchimy

Keyword(s):

Trade Balance ◽

High Growth ◽

Short Term ◽

Foreign Demand ◽

J Curve ◽

The World ◽

Curve Effect ◽

First Time ◽

The Empirical Analysis

This paper aims at analysing the relation between real trade balance and foreign demand in the case of a small opened economy, which highly depends upon the rest of the world for productive capital. Theoretical analysis allows us to bring forth a kind of “J-curve” effect. Indeed, when foreign demand for domestic goods increases, the country is to import in a first time in order to improve its productive capacities, resulting in worsening trade balance. However, in a second time, once the cumulated capital inventory became sufficient, the trade balance improves under the pressure of domestic exports high growth. The empirical analysis based on Australia from 1982 (1) to 2001 (1) supports this theory. We show there are negative short term and positive long term elasticities.

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