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

Šimáková, Jana

doi:10.18267/j.efaj.124

Cited by 6 publications

(1 citation statement)

References 19 publications

(15 reference statements)

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“…Most of the studies that tried to test J-curve existence have relied upon a reduced form trade balance model and regression analysis with not much support. Yet in some countries and in specific periods, the J-curve phenomenon has been recognised (for an extensive review of the literature see Akbostanci, 2004, Sim akov a, 2014, or Bahmani-Oskooee & Kutan, 2009. Considering frequent contrariety between these two concepts, we can conclude that the effects of exchange rate depreciations on exports, imports, and hence on trade balance are neither guaranteed nor instant.…”

Section: S-curve Phenomenon: a Conceptual Backgroundmentioning

confidence: 98%

Empirical evidence of an S-curve in Croatia

Tomić

2019

Economic Research-Ekonomska Istraživanja

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The impact of currency depreciation on the trade balance is still an empirically unanswered question within international and financial economics. This paper is pointed towards partial clarification of that question as the author analyses trade perspectives in Croatia through the concept of an S-curve. The S-curve is an extension of the J-curve, for the impact of exchange rate depreciation wears out after a while and there is no further improvement when all impacts are realised, meaning that at the top of the curve the slope is zero or negative. By focusing on the relationship between the terms of trade (exchange rate) and trade balance the author is trying to provide some new insights into trade dynamics over a business cycle in Croatia. The main result is that both unconditional and conditional relations (conditional to technology's role identified in the vector error correction model) are consistent with the empirical S-curve pattern of cross-correlations between the trade balance and the terms of trade (exchange rate). Nonetheless, the inability of the S-curve to depict the strength and/or the speed of the adjustment process before and after the terms of trade/exchange rate depreciation explains its limitation within policy recommendations for Croatia.

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Section: S-curve Phenomenon: a Conceptual Backgroundmentioning

confidence: 98%

Empirical evidence of an S-curve in Croatia

Tomić

2019

Economic Research-Ekonomska Istraživanja

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Macro-determinants of current account balance performance in selected African countries

Abille,

Meçik

2024

J. Soc. Econ. Dev.

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Most African countries are open to international trade as shown by their signatories to various trade agreements such as the Economic Partnership Agreement (EPA) with the EU, and the Forum on China-Africa Cooperation (FOCAC). However, these countries face persistent current account deficits and institutional underdevelopment. The existing literature investigates the underlying factors at country-specific levels while ignoring the role of institutions. Meanwhile, African countries are also rapidly transitioning towards economic integration with the establishment of the African Continental Free Trade Area Agreement (AFCFTA) to deepen intra-Africa trade. Therefore, for unionized policy proposition, this study controls for the effects of institutions and investigates the macro-determinants of the current account balance (CAB) performance using panel data from 2002 to 2020 for 20 African countries. To account for cross-country correlation and country-level heteroscedasticity, the study employed panel-corrected standard errors (PCSE) and feasible generalized least squares (FGLS) techniques for the governance indicators-related step-wise estimations. The results show that after controlling for the effects of institutions, income, trade openness, the price level, the interplay between manufacturing and financial sector development, and the money supply are the significant macro-determinants of the CAB performance in Africa. Further, the marginal info-graphics show that the predictive effects of value addition and financial development on the CAB increase positively with good governance and that improved governance could reverse any negative effects of trade openness on the CAB performance. Based on the findings, the study recommends inter alia that African countries pursue value-addition-oriented trade, zero Central Bank budgetary financing, and institutional quality improvement to enhance the performance of their CABs.

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Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

Kurtović

Halili²,

Maxhuni³

2017

Naše Gospodarstvo/Our Economy

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The paper investigates the effect of the real effective exchange rate depreciation of the lek on the trade balance of Albania using quarterly data from 1994 to 2015. Bounds testing cointegration approach, vector error correction model (VECM), and impulse response were used for the empirical analysis. The results of the study show a long-term cointegration between the real effective exchange rate (REER) and the trade balance (TB). Specifically, the REER depreciation positively affects the trade balance of Albania in both the long and short run, indicating the weak presence of the J-curve effect. Important recommendations were derived from the results.

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

Cited by 6 publications

References 19 publications

Empirical evidence of an S-curve in Croatia

Empirical evidence of an S-curve in Croatia

Macro-determinants of current account balance performance in selected African countries

Effect of Depreciation of the Exchange Rate on the Trade Balance of Albania

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