Real Exchange Rates And U.S. Bilateral Trade

Sukar, Abdulhamid; Zoubi, Taisier AlDaib

doi:10.19030/jabr.v12i4.5790

Cited by 13 publications

(3 citation statements)

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“…However, after the various lags complete their course, traders respond to currency changes and trade balance improves in the long run. Studies that examine the J‐curve effects include Magee (1973), Khan (1974), Goldstein and Khan (1976), Rose and Yellen (1989), Carter and Pick (1989), Mahdavi and Sohrabian (1993), Demirden and Pastine (1995), Sukar and Zoubi (1996), Doroodian et al (1999), Gupta‐Kapoor and Ramakrishnan (1999) and Baek and Koo (2009).…”

Section: Methodsmentioning

confidence: 99%

Implications of Yuan/dollar exchange rate for trade

Hilland

Devadoss²

2013

Journal of International Trade Law and Policy

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PurposeThough an undervalued Yuan is not the only factor that contributes to the US bilateral trade deficit with China, it is widely accepted as being one of the leading factors. The heightened debate over the value of the Yuan may lead to “beggar thy neighbour” retaliation. The purpose of this paper is to provide a historical review of the Y/$ exchange rate movements, review the US congressional bills to revalue the Y/$ exchange rate and Chinese Government's reactions, presents a conceptual analysis of the effect of the undervalued Yuan on trade between China, the USA, and competitors, and discuss the arguments for and against revaluation of the Yuan.Design/methodology/approachConceptual analysis graphically illustrates how the undervalued Yuan affects world trade and shows the benefits and losses for various countries.FindingsThough an undervalued Yuan is not the only factor that contributes to the US bilateral trade deficit with China, it is widely accepted as being one of the leading factors. Due to its effects on production, consumption, and trade, a solution is needed. Although measuring the exact misalignment of the Chinese currency has led to various results, it is generally agreed that the Yuan is undervalued, and the US Congress has been persistent in introducing various bills to tackle the problems arising from the undervalued Yuan. Arguments for and against revaluation has heightened debate which may lead to “beggar thy neighbour” retaliation.Originality/valueThis paper outlines very timely and pretentious trade issues between China and the USA and contributes to the area of research of exchange rate effects on international trade.

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Section: Methodsmentioning

confidence: 99%

Implications of Yuan/dollar exchange rate for trade

Hilland

Devadoss²

2013

Journal of International Trade Law and Policy

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“…In the study of Brada and Mendez (1988) in which they analyze the relationship between fluctuation and foreign trade, they found a relationship with positive direction between two variables by using horizontal section analyses. Sukar (1998) has analyzed USA exportation and exchange rate-extraneous income relationship by using co-integration tests and error correction models. He concluded that there is direct relationship between exportation and extraneous income while there is inverse relationship between exportation and exchange rate.…”

Section: Literature Reviewmentioning

confidence: 99%

Analysis of Exchange Rate-Foreign Trade Relationship with Asymmetric Causality Tests: Sample of Gaziantep

Çütçü¹,

Eren²

2017

IJARBSS

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Aim of this study is that testing the existence of exchange rate-foreign trade relationship. Also, it aims to analyze direction of the relationship via different economic tests by using two models which include monthly data of 2002:01-2016:02 periods. According to Hatemi-J co-integration and asymmetric causality test findings, it is accepted that there is causality and long termed relationship with structural break between exchange rate and importation. Also, with the aim of determining the existence of causality relationship, advanced time varying asymmetric causality test is used. Periodical relations are found.

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“…However, the literature cannot settle on magnitudes for these income elasticities of trade (Chinn, 2004; Marquez, 1999, 2002). Similarly, mixed evidence exists relating the sensitivity of exports and imports to changes in exchange rates including Baldwin and Krugman (1987), Kim (1991), Hickok and Hung (1991–92), Sukar and Zoubi (1996), Baily (2003), Chinn (2004), Milesi-Ferretti (2008) and Blecker (2011). These articles use either multilateral and/or bilateral frameworks.…”

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confidence: 99%

Cross-Price Effects and US Trade Elasticities

Bhandari

2013

Margin: The Journal of Applied Economic Research

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The traditional partial equilibrium model of trade is extended to include these cross-price effects in demand and supply. Theoretically, it is shown that these cross-price effects can impede trade balance adjustment in the presence of exchange rate and income shocks. Using quarterly US and rest-of-the-world data from 1975 to 2002, a fully modified general method of moments estimation of the structural equations demonstrates significance of cross-price effects in both the demand and supply of non-petroleum merchandise imports.

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Real Exchange Rates And U.S. Bilateral Trade

Cited by 13 publications

References 0 publications

Implications of Yuan/dollar exchange rate for trade

Implications of Yuan/dollar exchange rate for trade

Analysis of Exchange Rate-Foreign Trade Relationship with Asymmetric Causality Tests: Sample of Gaziantep

Cross-Price Effects and US Trade Elasticities

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