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The J-Curve Effect and the U.S. Agricultural Trade Balance

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  • Colin A. Carter
  • Daniel H. Pick

Abstract

According to the J-curve theory, following a currency depreciation, there will be an initial deterioration of the trade balance before an improvement is realized. This paper finds empirical evidence indicating the first segment of the J-curve does exist for the U.S. agricultural trade balance. A 10% depreciation of the U.S. dollar is estimated to lead a deterioration of the agricultural trade balance that will last for about nine months.

Suggested Citation

  • Colin A. Carter & Daniel H. Pick, 1989. "The J-Curve Effect and the U.S. Agricultural Trade Balance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 712-720.
    • Handle: RePEc:oup:ajagec:v:71:y:1989:i:3:p:712-720.
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    File URL: http://hdl.handle.net/10.2307/1242027
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    Cited by:

    1. Bosupeng, Mpho & Naranpanawa, Athula & Su, Jen-Je, 2024. "Does exchange rate volatility affect the impact of appreciation and depreciation on the trade balance? A nonlinear bivariate approach," Economic Modelling, Elsevier, vol. 130(C).
    2. Marilyne Huchet-Bourdon & Jane Korinek, 2011. "To What Extent Do Exchange Rates and their Volatility Affect Trade?," OECD Trade Policy Papers 119, OECD Publishing.
    3. Fulgence Dominick Waryoba, 2018. "Yuan Revaluation and China’s External Trade Performance," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 4(2), pages 112-119, June.
    4. Trofimov, Ivan D., 2020. "The J-curve Effect in Agricultural Commodity Trade: An Empirical Study of South East Asian Economies," MPRA Paper 106701, University Library of Munich, Germany.
    5. Baek, Jungho & Mulik, Kranti & Koo, Won W., 2006. "The J-Curve Phenomenon: Myth or Reality?," 2006 Annual meeting, July 23-26, Long Beach, CA 21382, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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