scholarly journals The Effect of Exchange Rate on Bilateral Trade Balance: New Evidence from Malaysia and Thailand

2001 ◽  
Vol 15 (3) ◽  
pp. 291-312 ◽  
Author(s):  
Ahmad Zubaidi Baharumshah
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Bilateral Trade Balance ◽  
New Evidence

scholarly journals FENOMENA KURVA J PADA NERACA PERDAGANGAN INDONESIA DENGAN ENAM NEGARA MITRA DAGANG UTAMA

2018 ◽  
Vol 1 (2) ◽  
pp. 10
Author(s):  
Anggraeni Tri Hapsari ◽  
Akhmad Syakir Kurnia
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Long Run ◽  
J Curve ◽  
Bilateral Trade Balance ◽  
Trading Partners ◽  
Short Run ◽  
Balance Of Trade ◽  
The Exchange Rate

Whether a J curve phenomenon exists or not on the balance of trade has been an interest for empirical investigation in international economics. The phenomenon is typically associated with the response of the balance of trade to the exchange rate dynamics. Since a country has different trade features with different trading partners, the trade balances adjustment to the exchange rate dynamics should be seen as a head to head phenomenon. This paper investigates the effect of real effective exchange rate (REER) on the bilateral trade balance between Indonesia and its six major trading partners, namely Japan, China, Singapore, United States, South Korea and India on a quarterly basis over the period 1995.1 to 2013.4. The short run and the long run effect of the REER on the balance of trade is expected to be captured using error correction model (ECM) and vector error correction model (VECM). Subsequently, impulse response function is used to trace out the behavior of the bilateral trade balance in response to the REER shock whereas forecast error variance decomposition (FEVD) is used to decay the effect of innovation variables in the system. The result indicates that in the long run a J curve phenomenon appears on the bilateral trade balance between Indonesia and Japan, China, Singapore as well as South Korea. In the short run, a J curve phenomenon is seen on the bilateral trade balance between Indonesia and China as well as Singapore. This confirms that a J curve is a head to head phenomenon that has correlation with the trade features. Thus, the correction mechanism to the trade balance in response to the exchange rate shock (i.e. exchange rate market intervention) should count trade features as a consideration

Bilateral Trade Balance, Exchange Rates, and Income: Evidence from Malaysia

2009 ◽  
Vol 9 (4) ◽  
pp. 1850183 ◽  
Author(s):  
Mohammed B. Yusoff
Keyword(s):  
United States ◽  
Exchange Rate ◽  
Exchange Rates ◽  
Trade Balance ◽  
Bilateral Trade ◽  
The United States ◽  
Bilateral Exchange ◽  
Long Run ◽  
Bilateral Trade Balance ◽  
The Usa

This study attempts to examine the effects of real bilateral exchange rates on Malaysia's bilateral trade balances with its three major trading partners: the USA, Japan, and Singapore. The results suggest that the bilateral trade balance, real exchange rate, domestic and foreign incomes are cointegrated. In the long-run, Malaysia's bilateral trade balances are found to be responsive to the changes of bilateral exchange rate in the cases of the USA and Singapore but irresponsive for Japan. There is a clear evidence of the J-curve effect only in the case of Malaysia's trade balance with the United States. The results also indicate that devaluation tends to be recessionary. The findings suggest that Malaysia could use undervalued exchange rate strategy to improve its trade balances with the United States and Singapore but not Japan.

scholarly journals Real exchange rate and trade balance in Turkey: Evidence from heterogeneous panel data

2020 ◽  
pp. 7-7
Author(s):  
Ahmet Kaya
Keyword(s):  
Exchange Rate ◽  
Panel Data ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Income Elasticity ◽  
Balance Model ◽  
Common Correlated Effects ◽  
The Usa ◽  
Heterogeneous Panel

In this study, the effect of real exchange rate on bilateral trade balance between Turkey and its 25 main trade partners is investigated for the period of 1996 - 2015 with heterogeneous panel data techniques. Trade balance model is estimated by using Mean Group (MG) estimator, which allows parameter heterogeneity, Common Correlated Effects Mean Group (CCEMG), and Augmented Mean Group (AMG) estimators, which both allow cross-section dependency and heterogeneity. Results indicate that the real exchange rate elasticity of the trade balance ranges between -0.40 and -0.45 and Marshall-Lerner (ML) condition is valid for Turkey. According to the results, the foreign income elasticity of trade balance ranges between 1.54 and 2.84, while for domestic income elasticity, it is found between -0.75 and -1.38. Country-specific results show that ML condition is valid for the USA, Belgium, Spain, Switzerland, Romania, and Russia at the bilateral level according to both CCEMG and AMG estimators.

scholarly journals The US-China Bilateral Trade Balance: Its Size and Determinants

10.3386/w6598 ◽  
1998 ◽  
Author(s):  
Robert Feenstra ◽  
Wen Hai ◽  
Wing Woo ◽  
Shunli Yao
Keyword(s):  
Trade Balance ◽  
Bilateral Trade ◽  
Bilateral Trade Balance ◽  
The Us

scholarly journals Bilateral Trade Balance of Bangladesh with BRICS Countries: A Static Panel Data Analysis

2015 ◽  
pp. 53-68 ◽  
Author(s):  
Kundu Nobinkhor
Keyword(s):  
Data Analysis ◽  
Panel Data ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Panel Data Analysis ◽  
Balance Model ◽  
Gravity Modeling ◽  
Brics Countries ◽  
Bilateral Trade Balance ◽  
Relative Factors

This paper explores the phenomenon of gravity modeling to examine the crucial relationships between the trade balances of Bangladesh with BRICS countries. Specifically, the relative factors determining trade in the popular gravity model have effects on the trade balance model. The trade balance depends on the relative GDP, relative per capita GNI, real exchange rate and import-weighted distance proxies for transportation cost of the partner countries to the home country. Using standard panel data techniques during the 1991-2013 period, the model is empirically tested and the results show significant effects of all the relative factors on the bilateral trade balance of Bangladesh in trading with BRICS countries. The robustness check of the model ensures the validity of the specification. The static panel data analysis explores the cross-country variations as well as the time-invariant country-specific effects on trade balance with heterogeneous economies and finds significant effects of all relative factors on the trade balance of Bangladesh.

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