Bilateral J-curve between Sri Lanka and its major trading partners

Perera, Wtk

doi:10.4038/ss.v39i1.3154

Cited by 4 publications

(4 citation statements)

References 17 publications

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“…These findings are similar to those of Bahmani-Oskooee (1989), Perera (2009) andXiaohong andPengjiao (2010). They also found out that the trade balance after currency depreciations increased at first, but then deteriorated over time.…”

Section: Resultssupporting

confidence: 80%

The Effects of Exchange Rate Change on the Trade Balance of Slovakia

Šimáková¹

2014

EFAJ

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Section: Resultssupporting

confidence: 80%

The Effects of Exchange Rate Change on the Trade Balance of Slovakia

Šimáková¹

2014

EFAJ

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“…Further, they claim that the trade balance of Sri Lanka will improve after four quarters. Perera (2009) also assesses the impact of real depreciation of the Sri Lankan rupee on trade balance in the long run and short run, using the auto-regressive distributed lag (ARDL) model employing bilateral trade data between Sri Lanka and the country’s six major trading partners. However, Perera (2009) concludes that the trade balance between Sri Lanka and its major trading partners does not confirm the J-curve phenomenon and there is no specific pattern in response to depreciation in the currency.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Perera (2009) also assesses the impact of real depreciation of the Sri Lankan rupee on trade balance in the long run and short run, using the auto-regressive distributed lag (ARDL) model employing bilateral trade data between Sri Lanka and the country’s six major trading partners. However, Perera (2009) concludes that the trade balance between Sri Lanka and its major trading partners does not confirm the J-curve phenomenon and there is no specific pattern in response to depreciation in the currency. In addition, Arize (1994) claims that there is no long-term relationship between the trade balance and the real effective exchange rate in Sri Lanka and India, although positive relationships exist for other Asian countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of the Effective Exchange Rate on the Trade Balance of Sri Lanka: Evidence from 2000 to 2013

Senadheera

2015

Margin: The Journal of Applied Economic Research

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This study investigates the possibility of improving the trade balance of Sri Lanka through currency depreciation. An error correction model (ECM) was used to examine the shortterm and long-term effects of nominal and real effective exchange rate depreciation on the trade balance. While there is no long-run relationship between the real effective exchange rate and the trade balance, depreciation of the nominal effective exchange rate will lead to a deterioration of the trade balance in the long term. Further, the results indicate that there is a positive causality relationship from the real GDP to the trade balance. Conversely, growth in money supply will worsen the country's trade balance in the long run. The empirical findings show that currency devaluation is not an effective policy tool to improve the country's trade balance.

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“…Furthermore, this study applied the DL (distributed lagged) model to find the parameter estimates and elasticities of the trade balances with respect to real devaluation and other relevant variables. The delay in the improvement of trade balance is identified as the time lag that producers and consumers take to adjust to the new prices (Junz & Rhomberg 1973 in [11]. Above all, this study uses differentials (changes) in current account balance and real exchange rate.…”

Section: Background To the Studymentioning

confidence: 99%

An Empirical Evaluation of the Bilateral Non-oil Export Trade Balance between Nigeria and Egypt: A Test of Marshall-Lerner Condition

Obasanmi

Imahe

2020

JEMT

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Bilateral trade is the exchange of goods between two nations promoting trade and investment. The two countries will reduce or eliminate tariffs, import quotas, export restraints, and other trade barriers to encourage trade and investment. The Marshall-Lerner (M-L) condition which is at the heart of the elasticities approach to the balance of Trade. The condition seeks to answer what happens to the current-account balance of a country when there is a devaluation of the currency. In this study, an empirical examination of the validation of M-L Condition was examined in the Bilateral Non-Oil Export Trade Balance between Nigeria and Egypt for the period 1980 to 2018. The distributed lag (DL) mechanism was used to estimate the short as well as the long run parameters. The results of the findings validated the M-L Condition in the trade relations with Egypt in the short and long run and that the M-L Condition is supported by data. The study amongst others recommended that for Nigeria to implement any devaluation policy, Nigeria must first and foremost ensure a substantial increase in her non-oil exports as against imports. This is the only way the benefits can be maximized for the country.

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Bilateral J-curve between Sri Lanka and its major trading partners

Abstract: Abstract

Cited by 4 publications

References 17 publications

The Effects of Exchange Rate Change on the Trade Balance of Slovakia

The Effects of Exchange Rate Change on the Trade Balance of Slovakia

Impact of the Effective Exchange Rate on the Trade Balance of Sri Lanka: Evidence from 2000 to 2013

An Empirical Evaluation of the Bilateral Non-oil Export Trade Balance between Nigeria and Egypt: A Test of Marshall-Lerner Condition

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