Munich Personal RePEc Archive

Asymmetry cointegration and the J-curve: New evidence from Korean bilateral trade balance models with her 14 partners

Bahmani-Oskooee, Mohsen and Baek, Jungho (2016): Asymmetry cointegration and the J-curve: New evidence from Korean bilateral trade balance models with her 14 partners.

[img]
Preview
PDF
MPRA_paper_83195.pdf

Download (601kB) | Preview

Abstract

Introduction of new econometric methods raises interest in assessing the old theories and the J-curve phenomenon is no exception. Like previous research we first use the linear ARDL approach of Pesaran et al. (2001) to investigate the phenomenon between Korea and each of her 14 trading partners. We then employ recent nonlinear ARDL approach of Shin et al. (2014) to show that in most cases, exchange rate changes have short-run and long-run asymmetric effects on the bilateral trade balances. Separating depreciations from appreciations which is the main feature of the nonlinear model relies upon nonlinear adjustment of the exchange rate and provides relatively more support for the J-curve effect.

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