The J-curve : evidence from Fiji
Data(s) |
01/07/2004
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Resumo |
This article provides new evidence on both long run and short-run determinants of trade balance for Fiji and investigates evidence of J-curve adjustment behaviour in the aftermath of a devaluation. We adopt a partial reduced form model that models the real trade balance directly as a function of the real exchange rate and real domestic and foreign incomes. Cointegration analysis is based on a recently developed autoregressive distributed lag approach—shown to provide robust results in finite samples. The long run elasticities are also estimated using a dynamic ordinary least squares approach and the Fully Modified Ordinary Least Squares (FM-OLS) approach. Amongst our key results we find that there is a long-run relationship between trade balance and its determinants. There is evidence of the J-curve pattern; growth in domestic income affects Fiji's trade balance adversely while foreign income improves it.<br /> |
Identificador | |
Idioma(s) |
eng |
Publicador |
Routledge |
Relação |
http://dx.doi.org/10.1080/0269217042000227088 |
Tipo |
Journal Article |