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The U.S. Trade Balance with Partners from Developing World: An Asymmetry Analysis of the J-Curve Effect

Mohsen Bahmani-Oskooee and Hanafiah Harvey ()
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Mohsen Bahmani-Oskooee and Hanafiah Harvey: University of Wisconsin-Milwaukee and Pennsylvania State University-Mont Alto

Authors registered in the RePEc Author Service: Mohsen Bahmani-Oskooee ()

Journal of Economic Development, 2018, vol. 43, issue 2, 29-44

Abstract: We consider the bilateral trade balance of the U.S. with each of her 13 trading partners from the developing world. When we apply the linear ARDL approach of Pesaran et al. (2001), we find support for the J-curve effect with six partners. However, when we apply Shin et al.¡¯s (2014) nonlinear ARDL approach to asymmetry analysis, we find support for the J-curve in the U.S. trade with 10 partners. Additionally, while we find support for the short-run asymmetric effects of exchange rate changes in almost all cases, the short-run effects translate into the long-run significant asymmetric effects in half of the cases.

Keywords: Trade Balance; Exchange Rate; Asymmetry Effects; The U.S. 13 Developing Partners (search for similar items in EconPapers)
JEL-codes: F31 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:jed:journl:v:43:y:2018:i:2:p:29-44