Assessing the Existence of the J?Cure Effect in Bangladesh

Rabeya Khatoon and Mohammad Mahbubur Rahman
Additional contact information
Rabeya Khatoon: Lecturer, Department of Economics, University of Dhaka
Mohammad Mahbubur Rahman: Graduate Student, Manchester University, UK

Bangladesh Development Studies, 2009, vol. 32, issue 2, 79-100

Abstract: This paper estimates the short run and long run impact of depreciation of Taka on trade balance in Bangladesh using cointegration techniques. The results support a positive influence of devaluation on trade balance both in the short and long run. The causal relationship between real exchange rate and trade balance is not robust, while the Granger test suggests a bidirectional causal relationship between devaluation and trade balance. The Sims test does not support the hypothesis that trade balance has influence on real exchange rate. On average, the declining segment of the ‘J-curve effect’ has not been evidenced for Bangladesh

Keywords: Existence of the J; Cure Effect; Bangladesh (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://bids.org.bd/uploads/publication/BDS/32/32-2/03_Khatoon%20&%20Rahman.pdf Full text (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:ris:badest:0481

Access Statistics for this article

Bangladesh Development Studies is currently edited by Dr. Binayak Sen

More articles in Bangladesh Development Studies from Bangladesh Institute of Development Studies (BIDS) E-17, Agargaon, Sher-E-Bangla Nagar, Dhaka 1207. Contact information at EDIRC.
Bibliographic data for series maintained by Meftaur Rahman, Cheif Publication Officer, BIDS ().