Do Exchange Rate Changes have Symmetric Effect on the S-Curve?
Mohsen Bahmani-Oskooee () and
Hadise Fariditavana ()
Additional contact information
Hadise Fariditavana: University of Wisconsin-Milwaukee
Economics Bulletin, 2014, vol. 34, issue 1, 164-173
The S-Curve hypothesis postulates that while the cross-correlation between the current exchange rate and future values of the trade balance could be positive, the same correlation between the current exchange rate and past values of the trade balance could be negative. In this paper we decompose the movement in the real effective exchange rate into partial sums of negative changes (depreciation) and positive changes (appreciation) and try to determine whether exchange rate changes have symmetric or asymmetric effects on the trade balance using the S-Curve concept. Like other areas in the literature we find that the effects are asymmetric in most countries since the S-Curve associated with depreciation does not resemble the one associated with appreciation.
Keywords: S-Curve; Asymmetry, Real Effective Rate, Partial Sums (search for similar items in EconPapers)
JEL-codes: F0 F3 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (13) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-14-00002
Access Statistics for this article
More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().