On the Asymmetric Effects of Exchange Rate Changes on Trade Flows: Evidence from the U.S.-Canada Trade in Forest Products

Up to now, relatively little attention has been given to the asymmetric effects of exchange rates on the trade balance in the forest economics literature. Thus, the primary thrust of this article is to probe the asymmetric impacts of exchange rates on exports and imports in the context of bilateral trade of forest products between the U.S.A. and Canada. To this end, we use the method of the nonlinear autoregressive distributed lag (NARDL). We discover that there is evidence that ups and downs of exchange rates appear to have asymmetric impacts on U.S. forest product trade with Canada in the long-run, though not in the short-run. Additionally, the dollar’s depreciation has a more substantial long-run effect than appreciation.