Bilateral Trade Elasticity of Serbia: Is There a J-Curve Effect?

Safet Kurtovic (), Blerim Halili () and Nehat Maxhuni ()
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Safet Kurtovic: Kurtovic: University of Travnik
Blerim Halili: University Union Nikola Tesla
Nehat Maxhuni: University Union Nikola Tesla

PSL Quarterly Review, 2017, vol. 70, issue 281, 185-210

Abstract: We assess the bilateral elasticity effect of real exchange rate depreciation on the export and import demand functions of Serbia and its nine leading trade partners. Analysing quarterly data for the 2004-2015, period we find the presence of a J-curve effect in the cases of Germany, Austria and Croatia. In contrast, we find that the Marshall-Lerner conditions are fulfilled in the case of bilateral trade with Austria. Finally, in our estimates the elasticity to income has a greater impact on the export and import demand functions than the elasticity to the exchange rate.

Keywords: Serbia; J-curve; Marshall-Lerner conditions; Trade balance (search for similar items in EconPapers)
JEL-codes: F14 F31 F32 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (4)

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