The dancing of the real exchange rate of US dollar and the US real trade balance

Matiur Rahman and Muhammad Mustafa

Applied Economics Letters, 1996, vol. 3, issue 12, 807-808

Abstract: The current study seeks to re-examine a possible long-run dynamic relationship between the trade-weighted real exchange rate of US dollar and US real trade balance by using the well-known cointegration methodology. The sample period includes observations from the second quarter of 1973 through the second quarter of 1992. The unit root test reveals that the trade-weighted real exchange value of dollar and the US real trade balance are individually nonstationary in levels. The ADF test concludes that there is no systematic long-run association between these two variables even under the flexible exchange rate system.

Date: 1996
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DOI: 10.1080/135048596355646

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