Title: Test of the bilateral trade J-curve between the USA and Australia, Canada, New Zealand and the UK
Authors: Yu Hsing, Bruno S. Sergi
Addresses: Department of Business Administration and Finance, College of Business, Southeastern Louisiana University, Hammond, LA 70402, USA. ' DESMaS ''V. Pareto'', University of Messina, Via T. Cannizzaro, 278, 98122 Messina, Italy
Abstract: This paper examines the J-curve hypothesis for Australia, Canada, New Zealand and the UK. Applying the vector error correction model and the generalised impulse response function, this study finds that the trade balance reacts to real depreciation in several different patterns in the short run. There is lack of support for a J-curve for Australia, Canada, and the UK. In the long run, real depreciation improves the trade balance for Australia, Canada, and New Zealand and does not influence the trade balance for the UK.
Keywords: J-curve; trade balances; real depreciation; cointegrating equations; USA; United States; Australia; Canada; New Zealand; United Kingdom; UK; bilateral trade; vector error correction; generalised impulse response function; global markets.
International Journal of Trade and Global Markets, 2010 Vol.3 No.2, pp.189 - 198
Published online: 27 Jan 2010 *Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article