Bilateral J-Curves between Pakistan and Her Trading Partners

Zehra Aftab () and Sajawal Khan ()

Trade Working Papers from East Asian Bureau of Economic Research

Abstract: Earlier studies that investigated the J-Curve phenomenon for Pakistan employed aggregate trade data. These studies suffered from the aggregation bias problem. In order to overcome this constraint, this paper tests the effects of real exchange rate depreciation in the Pakistani Rupee on the bilateral trade balance between Pakistan and her 12 respective trade partners. These countries, together, account for almost half of Pakistans total trade. In order to differentiate between the long-run equilibrium and short-run disequilibrium dynamics, and also to deal with non-stationary data, the ARDL approach isused. The results do not provide any support for the standard J-curve phenomenon.

Keywords: J-Curve; Trade Balance; Marshall-Lerner Condition (search for similar items in EconPapers)
JEL-codes: F12 F14 F31 (search for similar items in EconPapers)
Date: 2008-01
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Citations: View citations in EconPapers (13)

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Working Paper: Bilateral J-Curves between Pakistan and Her Trading Partners (2008)
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