The U.S. Trade balance with partners from developing world

An asymmetry analysis of the J-curve effect

Mohsen Bahmani-Oskooee, Hanafiah Harvey

Research output: Contribution to journalArticle

Abstract

We consider the bilateral trade balance of the U.S. with each of her 13 trading partners from the developing world. When we apply the linear ARDL approach of Pesaran et al. (2001), we find support for the J-curve effect with six partners. However, when we apply Shin et al.'s (2014) nonlinear ARDL approach to asymmetry analysis, we find support for the J-curve in the U.S. trade with 10 partners. Additionally, while we find support for the short-run asymmetric effects of exchange rate changes in almost all cases, the short-run effects translate into the long-run significant asymmetric effects in half of the cases.

Original languageEnglish (US)
Pages (from-to)29-43
Number of pages15
JournalJournal of Economic Development
Volume43
Issue number2
StatePublished - Jun 1 2018

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Short-run
Developing world
J-curve
Autoregressive distributed lag model
Asymmetric effects
Trade balance
Asymmetry
Bilateral trade
Exchange rates

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

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The U.S. Trade balance with partners from developing world : An asymmetry analysis of the J-curve effect. / Bahmani-Oskooee, Mohsen; Harvey, Hanafiah.

In: Journal of Economic Development, Vol. 43, No. 2, 01.06.2018, p. 29-43.

Research output: Contribution to journalArticle

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