Investigating the Relationship between Trade Balance and the Exchange Rate: The Case of Laos’ Trade with Thailand

2018 ◽  
Vol 19 (3) ◽  
pp. 590-603 ◽  
Author(s):  
Phouphet Kyophilavong ◽  
Muhammad Shahbaz ◽  
Ijaz Ur Rehman ◽  
Somchith Souksavath ◽  
Sengchanh Chanthasene
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Trade Policy ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
The Real ◽  
J Curve ◽  
The Exchange Rate ◽  
The Relationship

We investigate the nexus between Laos’ trade balance and its real exchange rate with Thailand. We apply the combined cointegration approach and find that the trade balance and the real exchange rate have cointegration. The devaluation of Laos’ Kip improves the trade balance, but there is no evidence of the J-curve phenomenon. Laos’s economic growth causes its trade balance to deteriorate. A rise in Thai income increases the trade balance of Laos. This study presents new insights for policymakers who seek to sustain trade with Thailand by designing a comprehensive trade policy.

The Effect of Exchange Rates on Trade Balance: An Empirical Study of Morocco

2018 ◽  
Vol 3 (1) ◽  
pp. 01-10
Author(s):  
Hicham Sadok
Keyword(s):  
Exchange Rate ◽  
Empirical Study ◽  
Exchange Rates ◽  
Foreign Trade ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Jel Classification ◽  
Strong Impact ◽  
J Curve ◽  
The Relationship

Objective - This paper aims to examine the relationship between exchange rates and trade balance in Morocco, to investigate whether the Marshall-Lerner condition and J-curve exist. Methodology/Technique - This paper attempts to identify the relationship between the real exchange rate and trade balance in Morocco between 2000 an 2015. Findings - Historically, exchange rates have had a strong impact on foreign trade in Morocco. Novelty - This study concludes that the fluctuation of exchange rates has no notable impact on the rate of foreign trade. Type of Paper: Empirical. Keywords: Exchange Rates; Trade Balance; Exports; Imports; Morocco. JEL Classification: D51, D59.

scholarly journals Asymmetric effect of exchange rate volatility on trade balance in Nigeria

2021 ◽  
Vol 3 (3) ◽  
pp. 342-359
Author(s):  
Nuraddeen Umar Sambo ◽  
◽  
Ibrahim Sambo Farouq ◽  
Mukhtar Tijjani Isma'il ◽  
◽  
...  
Keyword(s):  
International Trade ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Financial Development ◽  
Trade Balance ◽  
Exchange Rate Volatility ◽  
The Real ◽  
Non Linear ◽  
The Relationship ◽  
Real Exchange Rate Volatility

<abstract> <p>The relationship between real exchange rate volatility and the trade balance has been a contentious issue since the fall of Bretton woods agreement of 1973, owing to the lack of unanimity on the effect. This article provides empirical evidence of the link between the real exchange rate volatility and the trade balance in the light of financial development, confirming the assertion that the effect is significantly dependent on the country's level of financial development. Due to Nigeria's relatively undeveloped financial system, its exchange rate dampens the country's exports. Rather than studying the relationship in isolation, we examine the moderating role of financial development on the link between export and the real exchange rate volatility in this paper. The empirical estimation is based on the Nigeria's data set spanning the years 1980–2019, and it employs threshold autoregressive non-linear co-integration and non-linear ARDL estimation techniques. According to the findings, financial development magnifies the beneficial benefits of the real exchange rate on Nigeria's foreign trade. It also states that the uncertainty in foreign capital flows has a negative impact on Nigeria's international trade. The findings have broad policy implications, implying that in order to diversify and improve the economy's future growth and associated international trade, Nigeria's policymakers should promote adequate financial sector development, as financial shocks are amplified by poorly implemented credit markets.</p> </abstract>

scholarly journals Real exchange rate and innovation: empirical evidences

2018 ◽  
Vol 38 (2) ◽  
pp. 280-303 ◽  
Author(s):  
KEYNIS CÂNDIDO DE SOUTO ◽  
MARCO FLÁVIO CUNHA RESENDE
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Transmission Mechanism ◽  
The Real ◽  
Considerable Portion ◽  
Rate Effects ◽  
Recent Debate ◽  
The Relationship

ABSTRACT The recent debate on the determinants of the lung-run economic growth highlights the role of a competitive and stable real exchange rate to foster growth. In this debate, the works follow two approaches: theoretical and empirical. In the theoretical approach a considerable portion of the works points towards the innovation as a transmission mechanism of the real exchange rate effects on income. These works emphasize that the real exchange rate affects growth because of its impacts on the determinants of innovation, such as investment. Despite the theoretical debate, the focus of empirical works is on the analysis of the exchange rate effects on income while the relationship between exchange rate and innovation remains untapped. This article seeks to contribute to the literature by providing empirical evidence that supports the link between the real exchange rate and innovation.

scholarly journals Real exchange rate and trade balance of Pakistan: an empirical analysis

2013 ◽  
Vol 01 (01) ◽  
pp. 44-51
Author(s):  
Muhammad Bilal Saeed ◽  
Ijaz Hussain
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
Short Term ◽  
Correction Model ◽  
J Curve ◽  
Short Run ◽  
The Relationship ◽  
Balance Error

This study evaluates the relationship between real exchange rate and trade balance prevailed in Pakistan during the 1985-2010 period. Engel Granger residual based and Johansen Juselius tests have been used to inquire into the long term connection between exchange rate and trade balance. Error correction model is then employed to study the short term connection. It has been discovered that there exists a connection between real exchange rate and trade balance in long as well as short run. The evidences set forth lead to a decisive conclusion that Marshall Lerner Condition and J curve effect both hold in case of Pakistan.

scholarly journals Monetary Policy Transmission Through the Rate Channel in Some Countries in ASEAN

2020 ◽  
Vol 7 (2) ◽  
pp. 57
Author(s):  
Nguyen Thi Quynh Dung ◽  
Pham Thi Ha An
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Positive Impact ◽  
Exchange Rate Policy ◽  
The Real ◽  
Rate Policy ◽  
The Exchange Rate ◽  
Asean Countries ◽  
Table Data

Using a quantitative regression of table data through FEM and REM models, the study has measured the extent and direction of exchange rate impacts on the economic growth of five ASEAN countries namely, Vietnam, Indonesia, Singapore, Philippines, Malaysia, in the period of 1985-2015. The estimation results show that for every 1% rise in the real exchange rate, the multilateral force will have a positive impact, since the speed of economic growth of five countries increased by 2.09%. This result is consistent with some previous studies, especially in some developing countries. Further, the thesis has assessed the exchange rate policy in Vietnam and analyzed the situation. As a result, the authors have made some recommendations for exchange rate policy. The recommendations focus on the State’s intervention in adjusting the exchange rate and pay attention to the real exchange rate for policy evaluation. The recommendations of the thesis are consistent with the actual situation in the five ASEAN countries in order to stabilize economic growth.

scholarly journals The Real Exchange Rate, the Ghanaian Trade Balance, and the J-curve

2017 ◽  
Vol 18 (3) ◽  
pp. 380-392 ◽  
Author(s):  
Bernard Njindan Iyke ◽  
Sin-Yu Ho
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Trade Balance ◽  
The Real ◽  
J Curve

scholarly journals PENGARUH HARGA MINYAK DUNIA TERHADAP PERTUMBUHAN EKONOMI DI INDONESIA (MODERASI VARIABEL MONETER)

2020 ◽  
Vol 2 (3) ◽  
Author(s):  
Wilda Novita Sari ◽  
Ariusni Ariusni
Keyword(s):  
Economic Growth ◽  
Regression Analysis ◽  
Exchange Rate ◽  
Data Analysis ◽  
Secondary Data ◽  
Oil Prices ◽  
Analysis Tool ◽  
Data Analysis Tool ◽  
The Exchange Rate ◽  
The Relationship

Abstract: The purpose of this research is to be able to determine the effect of world oil prices on economic growth in Indonesia by applying the exchange rate moderating variable and the BI rate as a connecting variable. Descriptive and associative research is a type of research that is used with data collection techniques through a trusted official agency website that is classified in the quarterly time series secondary data. The data year in this study was from 2006 to 2018. Data analysis was carried out through descriptive and inductive analysis with a Moderated Regression Analysis (MRA) data analysis tool accompanied by a classic assumption test and a t test. Estimation results show that there are two research results; firstly, that the exchange rate has an effect on moderating the relationship between world oil prices and economic growth in Indonesia, secondly, that the BI rate has no influence connecting world oil prices and economic growth in Indonesia. Keywords: World oil prices, economic growth, exchange rates, BI rate, Moderated Regression Analysis (MRA).

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