IDEAS home Printed from https://ideas.repec.org/a/taf/uitjxx/v27y2013i2p156-172.html
   My bibliography  Save this article

The Effect of Exchange Rate on Exports and Imports: The Case of Jordan

Author

Listed:
  • Osama D. Sweidan

Abstract

This article aims at exploring the effect of exchange rate on exports and imports in Jordan over the 1976--2009 period. In addition, it tests if Jordan's workers' remittances create an effect, equivalent to "the Dutch disease effect," on Jordan's exports competitiveness, and it computes Marshall-Lerner condition to check the foreign exchange market stability. We employ the bounds testing approach to cointegration and the error correction model. We find that Jordan's competitiveness has a trend of deterioration. The influence of Jordan's exchange rate on exports and imports is active in the short-run only. Additionally, Jordan's workers' remittances have an impact similar to "the Dutch disease effect" via increasing the cost of living, thus reducing exports competitiveness. Also, Marshall-Lerner condition is less than one; the foreign exchange market will be unstable if exchange rate policy devaluation is adopted. The policy implication of the article is against adopting a devaluation policy in Jordan.

Suggested Citation

  • Osama D. Sweidan, 2013. "The Effect of Exchange Rate on Exports and Imports: The Case of Jordan," The International Trade Journal, Taylor & Francis Journals, vol. 27(2), pages 156-172, June.
    • Handle: RePEc:taf:uitjxx:v:27:y:2013:i:2:p:156-172
    DOI: 10.1080/08853908.2013.738515
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/08853908.2013.738515
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/08853908.2013.738515?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. Beine, Michel & Bos, Charles S. & Coulombe, Serge, 2012. "Does the Canadian economy suffer from Dutch disease?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 468-492.
    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. Ranajoy Bhattacharyya & Bipradas Rit, 2018. "On the Relationship between the Nominal Exchange Rate and Export Demand in India," South Asian Journal of Macroeconomics and Public Finance, , vol. 7(2), pages 260-282, December.
    2. Tamer Rawashdeh & Mahmoud Al-Rdaydeh & Basem Hamouri, 2020. "The Effect of International Currency Crises on the Balance of Payments: Evidence From Jordan," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(5), pages 275-284, October.
    3. Kemal Soyer & Hale Ozgit & Husam Rjoub, 2020. "Applying an Evolutionary Growth Theory for Sustainable Economic Development: The Effect of International Students as Tourists," Sustainability, MDPI, vol. 12(1), pages 1-20, January.
    4. Bilal KARGI, 2014. "Time Series Analysis about the Relationship between Foreign Trade and Exchange Rate in Turkish Economy," Timisoara Journal of Economics and Business, West University of Timisoara, Romania, Faculty of Economics and Business Administration, vol. 7(2), pages 123-133, December.
    5. Sweidan Osama D., 2013. "Exchange Rate Pass-Through into Import Prices in Jordan," Global Economy Journal, De Gruyter, vol. 13(1), pages 109-128, January.
    6. Mohsen Bahmani-Oskooee & Esmaeil Ebadi, 2016. "Have Technological Advances Reduced Response Time of Trade Flows to Changes in the Exchange Rate and Relative Prices?," The International Trade Journal, Taylor & Francis Journals, vol. 30(2), pages 115-131, March.
    7. Pasrun Adam & Pasrun Adam & Rosnawintang Rosnawintang & Ambo Wonua Nusantara & Abd Aziz Muthalib, 2017. "A Model of the Dynamic of the Relationship between Exchange Rate and Indonesia's Export," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 255-261.

    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. Arsham Reisinezhad, 2020. "The Dutch Disease Revisited: Theory and Evidence," Working Papers halshs-03012647, HAL.
    2. Liu, Tong & Lan, Bo, 2024. "On the conflict of natural resources abundance and export upgrading in upper-middle and high-income countries," Resources Policy, Elsevier, vol. 89(C).
    3. Vatsa, Puneet & Hu, Baiding, 2021. "Intra-federal effects of oil prices: Evidence from Canada," Resources Policy, Elsevier, vol. 74(C).
    4. Mardi Dungey & Renee Fry-McKibbin & Verity Linehan, 2014. "Chinese resource demand and the natural resource supplier," Applied Economics, Taylor & Francis Journals, vol. 46(2), pages 167-178, January.
    5. Evan Capeluck, 2014. "Convergence Across Provincial Economies in Canada: Trends, Drivers, and Implications," CSLS Research Reports 2014-03, Centre for the Study of Living Standards.
    6. Celal Bayari, 2016. "Economic Geography of the Australian Mining Industry," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(5), pages 552-566, December.
    7. Xuan Xie & Ke Li & Zhiqiang Liu & Hongshan Ai, 2021. "Curse or blessing: how does natural resource dependence affect city‐level economic development in China?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 65(2), pages 413-448, April.
    8. Oliver Loertscher & Pau S. Pujolas, 2024. "Canadian productivity growth: Stuck in the oil sands," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(2), pages 478-501, May.
    9. Mardi Dungey & Renee Fry‐Mckibbin & Vladimir Volkov, 2020. "Transmission of a Resource Boom: The Case of Australia," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(3), pages 503-525, June.
    10. Weber, Jeremy G., 2014. "A decade of natural gas development: The makings of a resource curse?," Resource and Energy Economics, Elsevier, vol. 37(C), pages 168-183.
    11. Serge Coulombe & Robin Boadway & Michel Beine, 2016. "Moving Parts: Immigration Policy, Internal Migration and Natural Resource Shocks," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 446, March.
    12. Jason Brown, 2014. "Production of natural gas from shale in local economies: a resource blessing or curse?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 1-29.
    13. Marek Szturo & Bogdan Włodarczyk & Alberto Burchi & Ireneusz Miciuła & Karolina Szturo, 2021. "Improving Relations between a State and a Business Enterprise in the Context of Counteracting Adverse Effects of the Resource Curse," Sustainability, MDPI, vol. 13(3), pages 1-14, January.
    14. Honorata Nyga-Łukaszewska & Tomasz M. Napiórkowski, 2022. "Does Energy Demand Security Affect International Competitiveness? Case of Selected Energy-Exporting OECD Countries," Energies, MDPI, vol. 15(6), pages 1-19, March.
    15. Chang, Kuei-Feng & Lin, Jin-Xu & Lin, Shih-Mo, 2021. "Revisiting the Dutch disease thesis from the perspective of value-added trade," Resources Policy, Elsevier, vol. 72(C).
    16. Elissaios Papyrakis & Ohad Raveh, 2014. "An Empirical Analysis of a Regional Dutch Disease: The Case of Canada," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(2), pages 179-198, June.
    17. Zoundi, Zakaria, 2024. "Wells or Welfare? Macroeconomic implications of the Canadian oil subsidy," Economic Modelling, Elsevier, vol. 139(C).
    18. Torfinn Harding & Anthony J Venables, 2016. "The Implications of Natural Resource Exports for Nonresource Trade," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 64(2), pages 268-302, June.
    19. Pilar Poncela & Eva Senra & Lya Paola Sierra, 2017. "Long-term links between raw materials prices, real exchange rate and relative de-industrialization in a commodity-dependent economy: empirical evidence of “Dutch disease” in Colombia," Empirical Economics, Springer, vol. 52(2), pages 777-798, March.
    20. Allah Morad Seif & Hossein Panahi & Davoud Hamidi Razi, 2017. "An Estimation of The Impact of Economic Sanctions and Oil Price Shocks on Iran-Russian Trade: Evidence from a Gravity- VEC Approach," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(3), pages 469-497, Summer.

    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:uitjxx:v:27:y:2013:i:2:p:156-172. 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/uitj20 .

    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.