Brazil-US commodity trade and the J-Curve

Mohsen Bahmani-Oskooee, Hanafiah Harvey, Scott W. Hegerty

Research output: Contribution to journalArticlepeer-review

8 Scopus citations

Abstract

Currency devaluation or depreciation is said to temporarily worsen a country's trade balance and improve it later, an effect that is called the J-Curve. Previous research that tested the J-Curve for Brazil used the country's aggregate trade flows with the rest of the world and did not find support for the phenomenon. In this article, we consider the trade flows between Brazil and a major trading partner, the United States, disaggregating their trade flows by commodity. We then test the empirical validity of the J-Curve for each of the 92 industries that trade between the two countries. We find support for the phenomenon in 31 industries. Therefore, disaggregation by industry seems to yield some support for the phenomenon.

Original languageEnglish (US)
Pages (from-to)1-13
Number of pages13
JournalApplied Economics
Volume46
Issue number1
DOIs
StatePublished - Jan 1 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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