Munich Personal RePEc Archive

Bangladesh’s Trade Partners and the J-Curve: An Asymmetry Analysis

BAHMANI-OSKOOEE, Mohsen and Rahman, Mir Obaidur and Kashem, Muhammad (2017): Bangladesh’s Trade Partners and the J-Curve: An Asymmetry Analysis.

[img]
Preview
PDF
MPRA_paper_81208.pdf

Download (523kB) | Preview

Abstract

Separating currency appreciations from depreciations and using nonlinear models in recent literature have improved discovering significant link between the trade balance and the exchange rate. We add to this growing literature by considering the experience of Bangladesh with 11 trading partners. When a linear model was used, support for the J-curve effect was present only with one small partner. However, when a nonlinear model was used, support increased to three countries including the largest partner, the U.S. which accounts for more than 12% of Bangladesh’s trade. Furthermore, the nonlinear models supported short-run asymmetry adjustment as well as short-run asymmetry effects of exchange rate changes in most cases. However, long-run asymmetric effects were limited to a few.

UB_LMU-Logo
MPRA is a RePEc service hosted by
the Munich University Library in Germany.