Does the J-curve hypothesis hold for a small open economy? Evidence from time-varying coefficients of a distributed-lag model for Tunisia

Mohamed Jelassi (), Jamel Trabelsi and Maryem Turki

International Economics, 2017, vol. 152, issue C, 107-115

Abstract: This paper determines how the Tunisian trade balance reacts to exchange rate changes during the post liberalization period, 1993:01 to 2014:03. To achieve this, a state space specification technique is employed to estimate a trade balance model for Tunisia. Our findings suggest that the real effective exchange rate has a significant impact on the trade balance of Tunisia, showing oscillating effects that can be best described by a “W-curve.”

Keywords: Trade balance; Effective real exchange rate; J- curve; Kalman Filter (search for similar items in EconPapers)
JEL-codes: C32 F14 F31 F32 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Does the J-curve hypothesis hold for a small open economy? Evidence from time-varying coefficients of a distributed-lag model for Tunisia (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inteco:v:152:y:2017:i:c:p:107-115

DOI: 10.1016/j.inteco.2017.06.002

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