Japan-US bilateral commodity-level trade and trade policy-related uncertainty under the COVID-19 pandemic: the nonlinear ARDL model

Abstract

This study examines whether t rade p olicy-related u ncertainties, scaled by TPU index, and the COVID-19 pandemic affect Japan’s bilateral commodity trade balance with the U.S concerning 60 industries. To this end, the nonlinear ARDL (autoregressive distributed lag) model is applied. Empirical findings of the disaggregated data model indicate that while changes in Japan’s TPU index have significant, either improving or worsening, impacts on this balance concerning 23 industries, changes in US TPU index have impact on only 32 industries. Additionally, based on the behaviors of Japanese and US consumers through their import demands, it can be interpreted that neither of them is uncertainty-sensitive to each other’s products and they continue to buy these products even if both countries’ TPU indexes keep rising. Another expected empirical finding is that the COVID-19 pandemic worsens the trade balances of Japan for different industries shown in the tables.

COVID-19 and domestic trade in Bulgaria

“…The third research area focused on the demand for industrial goods, foodstuff trade, and the corresponding supply chains. Ongan and Gocer (2022) studied the connection between the COVID-19 pandemic and the Japan-USA trade about the production of 60 industrial branches. The study applied an autoregressive distributed lags model to analyze the effect of the economic measures through the Trade Policy Uncertainty (TPU) index and found that its influence was country-dependent -more substantial in the USA than in Japan.…”

Demand for Money in Greece After Euro Area and Policy Uncertainties

“…It should be noted that the empirical findings of this study should be considered and interpreted within this assumption. The term euro area is used to describe the member countries of the European Union (EU) that use the Euro (€) as their national currency.6 This index is used in a wide range of studies(Bahmani-Oskooee and Saha (2017); Bahmani-Oskooee and Durmaz (2020);Ongan and Gocer (2021b).Review of Economic Analysis forthcoming (14) 2022 www.RofEA.org…”