Asleep at the wheel: the real interest rate experience in Australia

M. Zakir Saadullah Khan () and M. Ismail Hossain
Additional contact information
M. Zakir Saadullah Khan: Department of Economics, Comilla Univeristy, Comilla, Bangladesh
M. Ismail Hossain: Department of Economics, Jahangirnagar University, Savar, Dhaka, Bangladesh

Economic Analysis and Policy, 2010, vol. 40, issue 3, 377-391

Abstract: A re-thinking and clear understanding of the factors underlying a country's balance of trade position is needed as the global trade regime becomes more liberalized. The relationship between the overall trade balance and its determinants as propounded in the standard models may not necessarily be the same with the bilateral trade balances. This study has developed a model of bilateral trade balance that captures the effects of all factors influencing trade balance as suggested by elasticity, absorption, and monetary approaches and the popular Gravity Model with some extensions. Specifically, the present paper postulates that the relative factors determine the trading pattern, and hence the trade balance of a country in bilateral trade with partners while in the earlier models absolute factors determine the trade balance,. Using standard panel data techniques the model is empirically tested and the results show significant effects of all the relative factors on the bilateral trade balance of Bangladesh in trading with her partners. The robustness check of the model ensures the validity of the specification.

Keywords: Trade Balance; Panel Data (search for similar items in EconPapers)
JEL-codes: C23 F49 (search for similar items in EconPapers)
Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0313592610500377
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:40:y:2010:i:3:p:377-391

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().