IDEAS home Printed from https://ideas.repec.org/a/taf/apeclt/v4y1997i6p343-345.html
   My bibliography  Save this article

Devaluation and the trade balance: estimating the long run effect

Author

Listed:
  • Kamal Upadhyaya
  • Dharmendra Dhakal

Abstract

This study tests the effectiveness of devaluation on the trade balance in eight developing countries from Asia, Europe, Africa and Latin America. A unique and new methodology is used to estimate the long run effect of devaluation on the trade balance. The estimated results suggest that devaluation, in general, does not improve the trade balance in the long run. In some cases it even had a perverse effect.

Suggested Citation

  • Kamal Upadhyaya & Dharmendra Dhakal, 1997. "Devaluation and the trade balance: estimating the long run effect," Applied Economics Letters, Taylor & Francis Journals, vol. 4(6), pages 343-345.
    • Handle: RePEc:taf:apeclt:v:4:y:1997:i:6:p:343-345
    DOI: 10.1080/135048597355276
    as

    Download full text from publisher

    File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/135048597355276&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/135048597355276?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    2. Hsiao, Cheng, 1981. "Autoregressive modelling and money-income causality detection," Journal of Monetary Economics, Elsevier, vol. 7(1), pages 85-106.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sushanta Mallick, 2004. "A dynamic macroeconometric model for short-run stabilization in India," Applied Economics, Taylor & Francis Journals, vol. 36(3), pages 261-276.
    2. Nabeela KOUSAR* & Muhammad Rizwan YASEEN** & Imran QAISER***, 2017. "THE S-CURVES DYNAMICS OF TRADE: The Case Study of Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 27(1), pages 121-138.
    3. Ngor Diof, Maurice & Ndong, Benjamin, 2014. "Real Effective Exchange Rate Changes and Trade Balance in Senegal: twenty years after CFA franc devaluation," Conference papers 332457, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Ghassan, Hassan B., 2009. "Non Linear Adjustment in the MLR Condition: Evidence from Threshold Cointegration," MPRA Paper 54393, University Library of Munich, Germany.
    5. Paresh Kumar Narayan, 2006. "Examining the relationship between trade balance and exchange rate: the case of China's trade with the USA," Applied Economics Letters, Taylor & Francis Journals, vol. 13(8), pages 507-510.
    6. Godwin Kamugisha & Joe Eyong Assoua, 2020. "Effects of a Devaluation on Trade Balance in Uganda: An ARDL Cointegration Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(7), pages 1-42, July.
    7. Mallick, Sushanta K., 2005. "Tight credit policy versus currency depreciation: Simulations from a trade and inflation model of India," Journal of Policy Modeling, Elsevier, vol. 27(5), pages 611-627, July.
    8. Upadhyaya, Kamal P., 1999. "Currency devaluation, aggregate output, and the long run: an empirical study," Economics Letters, Elsevier, vol. 64(2), pages 197-202, August.
    9. Huseyin Kalyoncu & Ilhan Ozturk & Seyfettin Artan & Kahraman Kalyoncu, 2009. "Devaluation and trade balance in Latin American countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 27(1), pages 115-128.
    10. Bahmani-Oskooee, Mohsen & Satawatananon, Kaveepot, 2010. "US-Thailand trade at the commodity level and the role of the real exchange rate," Journal of Asian Economics, Elsevier, vol. 21(6), pages 514-525, December.
    11. Shahbaz, Muhammad & Jalil, Abdul & Islam, Faridul, 2010. "Real Exchange Rate Changes and Trade Balance in Pakistan: A Revisit," MPRA Paper 27631, University Library of Munich, Germany.
    12. Mohsen Bahmani-Oskooee & Amirhossein Mohammadian, 2019. "Who benefits from euro depreciation in the euro zone?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(3), pages 577-595, August.
    13. Mohammed B. Yusoff & Ilza Febrina, 2014. "Trade Openness, Real Exchange Rate, Gross Domestic Investment and Growth in Indonesia," Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 8(1), pages 1-13, February.
    14. Mohsen Bahmani-Oskooee & Tatchawan Kanitpong, 2019. "Asymmetric Effects of Exchange Rate Changes on Thailand-China Commodity Trade: Evidence From 45 Industries," Chinese Economy, Taylor & Francis Journals, vol. 52(3), pages 203-231, May.
    15. Ghassan, Hassan B., 2007. "La condition de Marshall-Lerner-Robinson est-elle stable ? Approche par le test GLS cointégration à niveau et puissance améliorés [Does the Marshall-Lerner-Robinson condition verify the stability? ," MPRA Paper 56354, University Library of Munich, Germany, revised 15 Jan 2008.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gary L. Shoesmith, 2000. "The Time-Series Relatedness of State and National Indexes of Leading Indicators and Implications for Regional Forecasting," International Regional Science Review, , vol. 23(3), pages 281-299, July.
    2. Michelle Casario, 1996. "North American Free Trade Agreement Bilateral Trade Effects," Contemporary Economic Policy, Western Economic Association International, vol. 14(1), pages 36-47, January.
    3. Lee, Shyan-Yuan & Tsai, Chih-Ling, 1998. "Model selection for causal models: The global procedure with AICC and AICU," Global Finance Journal, Elsevier, vol. 9(2), pages 205-223.
    4. Muradoglu, Yaz Gulnur & Metin, Kivilcim, 1996. "Efficiency of the Turkish Stock Exchange with respect to monetary variables: A cointegration analysis," European Journal of Operational Research, Elsevier, vol. 90(3), pages 566-576, May.
    5. Md. Shahiduzzaman & Khorshed Alam, 2014. "A reassessment of energy and GDP relationship: the case of Australia," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 16(2), pages 323-344, April.
    6. Elif Akben & Gökhan Özertan & Aslýhan D. Spaulding, 2008. "Are the Asian Equity Markets more Interdependent after the Financial Crisis?," Economics Bulletin, AccessEcon, vol. 6(16), pages 1-7.
    7. Dennis W. Jansen, 1989. "Does inflation uncertainty affect output growth? Further evidence," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 43-54.
    8. Pınar GÖKTAŞ, 2019. "Asymmetric Transition Effects of the Exchange Rate on Consumer Prices in Turkey," Sosyoekonomi Journal, Sosyoekonomi Society, issue 27(42).
    9. Arun Narayanasamy & Humnath Panta & Rohit Agarwal, 2023. "Relations among Bitcoin Futures, Bitcoin Spot, Investor Attention, and Sentiment," JRFM, MDPI, vol. 16(11), pages 1-24, November.
    10. UÄŸur Korkut Pata & Harun Terzi, 2016. "Testing for Symmetric and Asymmetric Causality between FDI and Foreign Trade in Turkey," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 19(62), pages 95-118, December.
    11. Zheng Yi & Chen Heng & Wing-Keung Wong, 2009. "China’s Stock Market Integration with a Leading Power and a Close Neighbor," JRFM, MDPI, vol. 2(1), pages 1-37, December.
    12. Martin Laurence & Francis Cai & Sun Qian, 1997. "Weak-form Efficiency and Causality Tests in Chinese Stock Markets," Multinational Finance Journal, Multinational Finance Journal, vol. 1(4), pages 291-307, December.
    13. Lin, Antsong & Swanson, Peggy E., 1997. "The U.S. dollar in global money markets: A multivariate cointegration analysis," The Quarterly Review of Economics and Finance, Elsevier, vol. 37(1), pages 139-150.
    14. Satya Paul & Colm Kearney & Kabir Chowdhury, 1997. "Inflation and economic growth: a multi-country empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 29(10), pages 1387-1401.
    15. repec:ebl:ecbull:v:6:y:2008:i:16:p:1-7 is not listed on IDEAS
    16. repec:ebl:ecbull:v:15:y:2005:i:19:p:1-10 is not listed on IDEAS
    17. Sturm, Jan-Egbert & Jacobs, Jan & Groote, Peter, 1995. "Productivity impacts of infrastructure investment in the Netherlands 1853-1913," Research Report 95D30, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    18. Tsani, Stela Z., 2010. "Energy consumption and economic growth: A causality analysis for Greece," Energy Economics, Elsevier, vol. 32(3), pages 582-590, May.
    19. Tsangyao Chang & Wenshwo Fang & Li-Fang Wen, 2001. "Energy consumption, employment, output, and temporal causality: evidence from Taiwan based on cointegration and error-correction modelling techniques," Applied Economics, Taylor & Francis Journals, vol. 33(8), pages 1045-1056.
    20. Kofi Amoateng, 1997. "How stable is relationship between US petroleum imports and economic growth?," Applied Economics Letters, Taylor & Francis Journals, vol. 4(9), pages 551-554.
    21. Ghosh, Suvankar & Troutt, Marvin D. & Thornton, John H. & Felix Offodile, O., 2010. "An empirical method for assessing the research relevance gap," European Journal of Operational Research, Elsevier, vol. 201(3), pages 942-948, March.
    22. Kyriakos Emmanouilidis & Christos Karpetis, 2020. "The Defense–Growth Nexus: A Review of Time Series Methods and Empirical Results," Defence and Peace Economics, Taylor & Francis Journals, vol. 31(1), pages 86-104, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:4:y:1997:i:6:p:343-345. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEL20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.