 Whose policy uncertainty affects trade flows between Japan and the U.S.?Mohsen Bahmani‐Oskooee, Ridha Nouira and Sami Saafi Australian Economic Papers, 2023, vol. 62, issue 3, 457-485 Abstract: Previous studies mostly assumed that the effects of policy uncertainty on trade flows are symmetric. In this article, we add to this literature by arguing and demonstrating that the effects could be asymmetric. Since asymmetry analysis requires using non‐linear models, such models yield a more significant outcome than linear models. We show this by considering the trade flows of 66 two‐digit U.S. exporting industries to Japan and 59 two‐digit Japanese exporting industries to the United States. While both the linear and non‐linear models predicted short‐run effects of the U.S. and Japanese policy uncertainty on exports of most industries, the long‐run effects were significantly different. In the long run, while the linear model predicted no significant effects of either uncertainty measure, the non‐linear model 12 (14) U.S. exporting industries that were affected by changes in the Japanese (the U.S.) policy uncertainty measure and six (10) Japanese exporting industries that were affected by changes in the Japanese (the U.S.) policy uncertainty measure. Several large industries were among the affected industries. Date: 2023 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:62:y:2023:i:3:p:457-485 Ordering information: This journal article can be ordered from Access Statistics for this article Australian Economic Papers is currently edited by Daniel Leonard More articles in Australian Economic Papers from Wiley Blackwell |
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