scholarly journals Defisit Neraca Perdagangan: J-Curve, Perang Dagang dan Model Salter Corden

2019 ◽  
Vol 8 (2) ◽  
pp. 245-265
Author(s):  
Muhammad Firdaus ◽  
Rini Satriani ◽  
Syarifah Amaliah ◽  
Fahmi Ahmad Salam ◽  
Muhammad Fazri
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
External Shocks ◽  
Exchange Rate Fluctuations ◽  
Long Run ◽  
J Curve ◽  
Trade War ◽  
The Exchange Rate

Exchange rate fluctuations and external shocks such as the trade war are predicted to put pressure on Indonesia’s trade balance. Based on VECM analysis, the exchange rate and Indonesia’s aggregate trade balance followed the J-Curve. Additionally, the trade war had impact on Rupiah depreciation and trade balance. The study also confirms eight export-oriented industries that are resilient to shocks and classified into four behaviors: (i) industries following the J-Curve; (ii) industries following the J-Curve in the long run; (iii) industriy which are not fully confirmed J-Curve, and (iv) Rest sector. The implication of this study emphasize the development of export-oriented and labor-intensive industries (Salter-Corden model). Keywords: J Curve; exchange rate; trade war; Salter Coden Model; VECM ------------------------------------------- Pergerakan nilai tukar Rupiah dan guncangan eksternal seperti perang dagang diprediksi akan memberikan tekanan terhadap neraca perdagangan. Berdasarkan analisis VECM, nilai tukar rupiah dan neraca perdagangan Indonesia secara agregat mengikuti fenomena J-Curve. Perang dagang terbukti memengaruhi depresiasi nilai tukar Rupiah dan neraca perdagangan Indonesia. Terdapat delapan industri berorientasi ekspor yang memiliki resiliensi terhadap guncangan dan diklasifikasikan menjadi empat, yakni: (i) Kelompok industri yang mengikuti fenomena J-Curve sepenuhnya; (ii) Kelompok industri dengan fenomena J-Curve pada jangka panjang; (iii) Kelompok industri yang tidak sepenuhnya mengikuti fenomena J-Curve, dan (iv) Industri lainnya. Implikasi studi ini menekankan pengembangan industri yang berorientasi ekspor dan intensif tenaga kerja (Salter-Corden model).

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

Turkish tourism, exchange rates and income

2016 ◽  
Vol 23 (1) ◽  
pp. 66-77 ◽  
Author(s):  
Gokhan H. Akay ◽  
Atilla Cifter ◽  
Ozdemir Teke
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Significant Variable ◽  
Correction Model ◽  
Long Run ◽  
J Curve ◽  
Curve Effect ◽  
Short Run ◽  
The Exchange Rate ◽  
Maximum Likelihood Technique

This study examines the effects of the exchange rate and income on Turkish tourism trade balance (TB) using quarterly data for the period 1998–2011. The authors use tourism trade-weighted exchange rate indices and foreign income derived from country-based tourism trade. They employ Johansen’s maximum likelihood technique to estimate the long-run effects of the exchange rate and income on tourism, and employ an error correction model to analyse the short-run effects. The empirical results suggest that income is the most significant variable in explaining tourism TB in the long run. The exchange rate and foreign income positively affect the TB, while domestic income negatively influences it. In the short-run, however, domestic income is the only significant factor. The authors also find no evidence of a J-curve effect in the Turkish tourism TB. These findings are robust to using nominal values.

scholarly journals Trade Balance and Exchange Rate in Thailand & the Implications for Vietnam: An Application using Instrumental Variable and the Heterogeneous Panel Cointegration Methods

2016 ◽  
Vol 23 (01) ◽  
pp. 137-160
Author(s):  
Anh Vo The ◽  
Duc Vo Hong
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Panel Cointegration ◽  
Least Square ◽  
Monetary Policies ◽  
Ordinary Least Square ◽  
Long Run ◽  
Trading Partners ◽  
The Exchange Rate ◽  
Heterogeneous Panel

This study aims to investigate the link of trade balance and exchange rate for the case of Thailand in different aspects by initially attempting to examine what factors determine the trade balance in Thailand and then to test the long-run relationship between the exchange rate and Thailand’s trade balance. The empirical findings indicate that the exchange rate and relative growth rate of income play central roles in explaining Thailand’s trade balance, and fiscal and monetary policies are beneficial in some cases. Additionally, panel fully modified ordinary least square (FMOLS) estimations illustrate that a devaluation of Thailand Baht offers a significantly positive improvement on its trade balance in the long run, especially for the groups of countries with upper middle and high income in America and Europe. Individual FMOLS regressions of Thailand’s trade balance and each of its 62 trading partners suggest that a devaluation of Thailand’s currency would stimulate Thailand’s trade performance with over 20 trading partners, but hurt its performance with the other 10 countries and be inconclusive to the others.

scholarly journals Aggregation, asymmetry, and common factors for Bangladesh’s exchange rate–trade balance relation

2021 ◽  
Author(s):  
Rabeya Khatoon ◽  
Md Emran Hasan ◽  
Md Wahid Ferdous Ibon ◽  
Shahidul Islam ◽  
Jeenat Mehareen ◽  
...  
Keyword(s):  
Time Series ◽  
Exchange Rate ◽  
Trade Balance ◽  
Time Series Data ◽  
Government Support ◽  
Series Data ◽  
Aggregate Analysis ◽  
Long Run ◽  
J Curve ◽  
Rate Relationship

AbstractWe present an application of the recent CS-ARDL methodology in the context of a country’s trade balance–exchange rate relationship. The trade balance is expected to deteriorate first before improving in response to currency depreciation and vice versa, widely known as the J-curve effect satisfying the Marshall–Lerner condition in the long run. Combining bilateral and aggregate analysis in one setting by constructing specific panel data with one reference country, we find that aggregate analysis is sensitive to our allowance for heterogeneity. Estimates using the aggregate time series data show evidence favoring the J-curve relation, whereas the aggregate analysis resulting from the panel time series data shows that currency appreciation improves trade balance in Bangladesh in the long run, which goes against the Marshall–Lerner condition. With the reference of the existing commodity-level literature, we argue that this atypical scenario lines with the realities of a ‘small’ economy like Bangladesh, where her exporters attempt to maintain their market share with some government support. The study provides essential policy suggestions by identifying the significant contributors to Bangladesh’s trade balance–exchange rate relationship: China, Japan, and Singapore.

scholarly journals Linear and Nonlinear Dynamics of the Turkish Trade Balance

2016 ◽  
Vol 8 (2) ◽  
pp. 70 ◽  
Author(s):  
Huseyin Karamelikli
Keyword(s):  
United States ◽  
United Kingdom ◽  
Exchange Rate ◽  
Trade Balance ◽  
Bilateral Trade ◽  
Time Series Data ◽  
Series Data ◽  
Long Run ◽  
J Curve ◽  
Short Run

<p>This study empirically analyses bilateral trade of Turkey with her main trade partners using monthly time series data over the period of 2000 to 2015. J-curve theory and short-run dynamics of bilateral trade is tested by linear ARDL and Non-linear ARDL approaches. The empirical results indicate that there is no J-curve effect during short-run for United States and for France; it symmetrically exists to Germany and asymmetrically to United Kingdom. Also long-run relationship between exchange rate and trade balance has mixed results. Asymmetric long-run relationship between exchange rate and trade balance for United States exists where it is symmetrically most appropriate for Germany. In the other hand this study failed to verify any long-run relationship between exchange rate and trade balance for France and for United Kingdom.</p>

scholarly journals Evaluating the Persistence of j Curve Phenomenon in the Bilateral Trade between Bangladesh and USA: The ARDL Bounds Testing Approach and Granger Causality Analysis

2021 ◽  
pp. 74-81
Author(s):  
Subroto Dey ◽  
Homamul Islam
Keyword(s):  
Exchange Rate ◽  
Error Correction ◽  
Granger Causality ◽  
Trade Balance ◽  
Error Correction Model ◽  
Correction Model ◽  
Long Run ◽  
J Curve ◽  
The Usa ◽  
Short Run

Most of the previously examined studies that investigated the repercussion of the trade balance to exchange rate mutation relied on the assumption that appreciation and depreciation behave symmetrically, recently several works have been conducted using the asymmetric analysis. In this work, we exhibited a model employing the disaggregated data (bilateral) of trade balance with the USA. In our pursuit, we endeavored to disclose a phenomenon of the J curve, is this pattern present in our trade balance and exchange rate bearing? In this article, first, we checked the stationary of data set and discovered the stationary employing the Augmented Dickey-Fuller test, Phillips Peron then applying the ARDL bounds test of cointegration apropos to find out the long run co integrated equations and last of all, tried to investigate the short-run and long-run relationship among the variables, while we used the ECM (error correction model). The Toda-Yamamoto Procedure for Granger Causality in a VAR framework has been applied to detect the causal direction. In our model, we have blazoned the negative short-run rapport between the exchange rate and trade balance in the bilateral data, whereas we have remarked a discrepant bearing in the long run and we did receive the evidence of the appearance of j pattern in the relationship between exchange rate and trade balance. Dispensing the error correction model, we found domestic higher price level hinders the trade balance in the short run, did not find any evidence of foreign income stimulate the export. Toda-Yamamoto Procedure for Granger Causality reveals the unidirectional causal effect from exchange rate to trade balance of Bangladesh with the USA.

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.

scholarly journals Dynamic Interrelationships between the U.S. Agricultural Trade Balance and the Macroeconomy

2007 ◽  
Vol 39 (3) ◽  
pp. 457-470 ◽  
Author(s):  
Jungho Baek ◽  
Won W. Koo
Keyword(s):  
United States ◽  
Exchange Rate ◽  
Money Supply ◽  
Trade Balance ◽  
The United States ◽  
Agricultural Trade ◽  
Long Run ◽  
Trading Partners ◽  
The Exchange Rate ◽  
The U.S

The effects of the exchange rate and the income and money supply of the United States and its major trading partners on the U.S. agricultural trade balance are examined using an autoregressive distributed lag (ARDL) model. Results suggest that the exchange rate is the key determinant of the short- and long-run behavior of the trade balance. It is also found that the income and money supply in both the United States and the trading partners have significant impacts on U.S. agricultural trade in both the short and long run.

scholarly journals An Empirical Time Series Econometric Study of the J-curve Effect of Exchange Rate in Trade Balance between China and the US

2020 ◽  
pp. 35-46
Author(s):  
Ming-Lu Wu
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Unit Root Test ◽  
Real Effective Exchange Rate ◽  
Quarterly Data ◽  
Long Run ◽  
J Curve ◽  
The Us ◽  
Curve Effect ◽  
Short Run

Background and Aims: With the tensed relationship between China and the US, investigating the trade relationship between the two big countries has received more attention than before. This paper is just towards that direction to empirically examine the relationship between China’s real effective exchange rate (REER) and trade balance with the US in both the long-run and short-run, which may exhibit the J-curve effect – currency depreciation deteriorates trade balance in the short-run but promotes trade balance in the long-run – in China’s international trade with the US. Data and Methodology: Quarterly data on China’s REER, trade balance and gross domestic product (GDP, for income) and the US GDP from 2001 to 2017 are retrieved from relevant official websites for the current study. Unit-root test is first conducted on each modeling variable and its first difference to examine the stationarity of the variables. Autoregressive distributed lag (ARDL) approach with error-correction modeling (ECM) cointegration is then adopted to test the popular hypothesis of J-curve effect using the available quarterly data. Results and Conclusion: The modeling results reject the J-curve effect in the short-run but show a long-lasting positive effect of Chinese yuan’s depreciation in China’s trade balance with the US. Also, the US GDP has a positive and much stronger effect than Chinese GDP on China’s trade balance. As such, it is suggested that China should maintain a good relationship with the US and a stable exchange rate for long-run trade balance and economic growth at an appropriate level or rate.

IS THERE J-CURVE EFFECT IN THE COMMODITY TRADE OF SINGAPORE WITH MALAYSIA? AN EMPIRICAL STUDY

2018 ◽  
Vol 63 (03) ◽  
pp. 567-591
Author(s):  
MOHSEN BAHMANI-OSKOOEE ◽  
HANAFIAH HARVEY
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Commodity Trade ◽  
Long Run ◽  
J Curve ◽  
Trading Partners ◽  
Short Run ◽  
Exchange Rate Changes ◽  
Small Industries ◽  
The Impact

A previous study that investigated the impact of exchange rate changes on the trade balance of Singapore with each of its 13 largest trading partners on bilateral basis found significant long-run effects in four out of 13 cases. In the trade balance between Singapore and Malaysia as a major partner, the real exchange rate had neither short-run nor long-run significant effects. To reduce the aggregation bias, in this paper, we disaggregate the trade flows between the two countries by industry and consider the trade balance of each of the 136 industries that trade between the two countries. We find that the trade balance of 79 industries are affected by exchange rate changes in the short run. However, short-run effects last into the long run in only 19 industries which mostly happen to be small industries.

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