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Bilateral Trade Elasticity of Serbia: Is There a J-Curve Effect?

Author

Listed:
  • Safet Kurtovic

    (Kurtovic: University of Travnik)

  • Blerim Halili

    (University Union Nikola Tesla)

  • Nehat Maxhuni

    (University Union Nikola Tesla)

Abstract

We assess the bilateral elasticity effect of real exchange rate depreciation on the export and import demand functions of Serbia and its nine leading trade partners. Analysing quarterly data for the 2004-2015, period we find the presence of a J-curve effect in the cases of Germany, Austria and Croatia. In contrast, we find that the Marshall-Lerner conditions are fulfilled in the case of bilateral trade with Austria. Finally, in our estimates the elasticity to income has a greater impact on the export and import demand functions than the elasticity to the exchange rate.

Suggested Citation

  • Safet Kurtovic & Blerim Halili & Nehat Maxhuni, 2017. "Bilateral Trade Elasticity of Serbia: Is There a J-Curve Effect?," PSL Quarterly Review, Economia civile, vol. 70(281), pages 185-210.
    • Handle: RePEc:psl:pslqrr:2017:24
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    References listed on IDEAS

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    Cited by:

    1. Ecaterina TOMOIAGA & Monica Ioana POP SILAGHI, 2022. "Testing the Marshall-Lerner condition for Romania," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(1(630), S), pages 39-48, Spring.
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    3. Safet Kurtović & Blerim Halili & Nehat Maxhuni, 2019. "Exchange rate pass-through into import prices: evidence from Central and Southeast European countries," Indian Economic Review, Springer, vol. 54(1), pages 51-80, June.

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    More about this item

    Keywords

    Serbia; J-curve; Marshall-Lerner conditions; Trade balance;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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