The J-curve and bilateral trade balances of Indonesia with its major partners: are there asymmetric effects?

Mohsen Bahmani-Oskooee, Hanafiah Harvey

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

With advances in econometric methodologies, old concepts are now receiving a renewed attention and the J-curve is no exception. Previous research that tested the phenomenon assumed that the effects of exchange rate changes on the trade balance are symmetric. Asymmetry analysis and asymmetry cointegration is the new direction that is currently being considered. We add to this later literature by considering the asymmetric effects of exchange rate changes on the bilateral trade balances of Indonesia with each of her major trading partners after accounting for Asian Financial Crisis of 1997 and Global Financial Crisis of 2008. We find support for short-run asymmetric effects in almost all the cases, short-run cumulative or impact asymmetric effects in the trade with five partners and long-run significant asymmetric effects in five bilateral models.

Original languageEnglish (US)
Pages (from-to)63-76
Number of pages14
JournalNew Zealand Economic Papers
Volume53
Issue number1
DOIs
StatePublished - Jan 2 2019

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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