What is it about?
Several studies have tested the J-curve phenomenon for Australia using non-stationary aggregate trade data and have provided mixed results. They not only suffer from the 'aggregation bias problem' but also from the 'spurious regression problem'. To overcome these problems, in this paper we investigate the short-run and the long-run effects of real depreciation of the Australian dollar on the trade balance between Australia and each of her 23 trading partners using quarterly data over the 1973-2001 period and recent advances in cointegration analysis. The results from the bound testing approach for cointegration and error-correction modeling does not provide much support for the J-curve phenomenon. Copyright Blackwell Publishing Ltd/ University of Adelaide and Flinders University 2005..
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Why is it important?
This is the first paper on testing bilateral J-Curve hypothesis for Australia.
Perspectives
Using ARDL approach we tested the hypothesis for Australia.
Dr Gour Gobinda Goswami
North South University
Read the Original
This page is a summary of: THE BILATERAL J-CURVE: AUSTRALIA VERSUS HER 23 TRADING PARTNERS, Australian Economic Papers, June 2005, Wiley,
DOI: 10.1111/j.1467-8454.2005.00252.x.
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