The J-Curve: Evidence from Industry Trade Data between US and UK

Mohsen Bahmani-Oskooee and M Kovyryalova

Economic Issues Journal Articles, 2008, vol. 13, issue 1, 25-44

Abstract: Previous research seeking to assess the short-run and long-run effects of currency depreciation on the UK trade balance has employed either aggregate trade data between U.K. and the rest of the world or bilateral trade data between U.K. and one of its major trading partners, the US. Neither group of studies was able to discover any significant relation beween the two variables. In this paper we disaggregate the trade data between the US and UK at the commodity level and try to assess the impact of changes in the real dollar-pound bilateral rate on the trade balance of each industry. Using the bounds-testing approach to cointegration and error-correction modeling we show that 107 of 177 industries' trade balance respond to a real depreciation in the British pound in the short-run. The short-run effects last into the long-run only in 66 industries, supporting a new definition of the J-Curve.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.economicissues.org.uk/Files/108Bahmani-Oskooee.pdf (application/pdf)

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:eis:articl:108bahmani

Access Statistics for this article

More articles in Economic Issues Journal Articles from Economic Issues Contact information at EDIRC.
Bibliographic data for series maintained by Dan Wheatley ().