The J-curve Revisited: An Empirical Analysis for Canada

George Georgopoulos ()

Atlantic Economic Journal, 2008, vol. 36, issue 3, 315-332

Abstract: This paper examines exchange rate and trade data to determine whether J-curve effects have occurred for Canada in recent history. With a unique set of data on import and export volumes, the response of the trade balance and its components to exchange rate changes are determined empirically over 1981:1–2005:12 through impulse response functions. The responses have taken into account dominant long-run feedback effects, where the long-run parameters have been estimated by the Johansen cointegration technique. The results show the J-curve phenomenon does not exist for Canada. Robustness checks show the results do not change when looking at the responses over the pre-NAFTA and NAFTA periods. Copyright International Atlantic Economic Society 2008

Keywords: J-curve; Exchange rate pass-through; Vector autoregressions; Impulse response function; Cointegration; E40; F10; F30; F41 (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:kap:atlecj:v:36:y:2008:i:3:p:315-332

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DOI: 10.1007/s11293-008-9124-z

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