Faridul, Islam and Mohammad, Iqbal Tahir and Muhammad, Shahbaz (2012): Income terms of trade and trade balance: the long run evidence from Bangladesh.
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The paper implements the Autoregressive Distributed Lag (ARDL) approach to cointegration to test the Harberger-Laursen-Metzler (HLM) effect in the context of Bangladesh. The HLM effect predicts that a rise in terms of trade from an exogenous shock to a small open economy will lead to an improvement in that country’s trade balance. Our findings confirm a long run relationship. The Granger causality test reports unidirectional causality from income terms of trade to trade balance. Results are consistent with the theoretical predictions.
|Item Type:||MPRA Paper|
|Original Title:||Income terms of trade and trade balance: the long run evidence from Bangladesh|
|English Title:||Income Terms of Trade and Trade Balance: The Long Run Evidence from Bangladesh|
|Keywords:||Income terms of trade, cointegration, ARDL|
|Subjects:||F - International Economics > F1 - Trade|
|Depositing User:||Muhammad Shahbaz|
|Date Deposited:||26. Apr 2012 13:10|
|Last Modified:||14. Feb 2013 09:16|
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