scholarly journals PENGARUH NILAI TUKAR RIIL TERHADAP NERACA PERDAGANGAN BILATERAL INDONESIA: Kondisi Marshall-Lernerdan Fenomena J-curve

2007 ◽  
Vol 8 (3) ◽  
pp. 1-26
Author(s):  
Jardine A Husman
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Minor Role ◽  
Export Demand ◽  
Quarterly Data ◽  
J Curve ◽  
Trading Partners ◽  
Pass Through ◽  
A Minor ◽  
The Impact

The paper analyzes the Marshall-Lerner condition on Indonesian trade with its major trading partners. This study also investigates the existance of J-curve and covers the issue of the indirect pass-through effect, particularly the impact of the real exchange rate change on the Indonesian export performance.We apply the VECM model on the quarterly data of Indonesia and 8 of its trading partners, during the period of 1993:1-2004:4. The estimation result on the overall sample shows that the condition of Marshall-Lerner is satisfied, implying the rupiahs depreciation will increase the Indonesian export. Using each trading partner pair data, the Marshall-Lerner condition is not satisfied on the case of Singapore and England due to the inelastic export demand as the Indonesian export to both countries is mostly a consumption goods.The J-curve phenomenon is only found in the case of Japan, South Korea and Germany implying the depreciation of Rupiahs will increase Indonesian export. The elasticity estimation shows that 1% depreciation of Rupiahs only raise Indonesian export-import ratio by 0.37%. This small number strongly indicates that real exchange rate only plays a minor role on the Indonesian export performance.JEL Classification: C22, F14Keywords: Exchange rate, J-Curve, Marshall-Lerner, export, VECM. 

Book Reviews

2017 ◽  
Vol 55 (1) ◽  
pp. 231-232
Keyword(s):  
Exchange Rate ◽  
External Financing ◽  
J Curve ◽  
Pass Through ◽  
The Interest Rate ◽  
External Sector ◽  
Exchange Rate Pass Through ◽  
The Impact ◽  
Effectiveness Of Monetary Policy

R.K. Pattnaik of SP Jain Institute of Management and Research reviews “Managing the Macroeconomy: Monetary and Exchange Rate Issues in India,” by Ramkishen S. Rajan and Venkataramana Yanamandra. The Econlit abstract of this book begins: “Provides an empirical assessment of some of India's crucial policy challenges regarding its monetary and external sector management. Discusses a macroeconomic overview of the Indian economy; the effectiveness of monetary policy in India--the interest rate pass-through channel; understanding exchange rate and reserve management in India; the impact of exchange rate pass-through on inflation in India; rupee movements and India's trade balance--exploring the existence of a J-curve; and external financing in India--sources and types of foreign direct investment.”

scholarly journals The Impact Of Exchange Rate Pass-Through On Serbian Export Competitiveness

2014 ◽  
Vol 52 (2) ◽  
pp. 197-214
Author(s):  
Ivan Marković ◽  
Milan Marković
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Foreign Currency ◽  
Nominal Exchange Rate ◽  
National Currency ◽  
The Real ◽  
Positive Effects ◽  
Pass Through ◽  
Exchange Rate Pass Through ◽  
The Impact

Abstract The permanent existence of inflation in Serbia adversely affects achievement of macroeconomic stability. Its effects are reflected in a decrease in the real exchange rate, low price competitiveness of exports and deterioration in the balance of payments. The real exchange rate is an instrument which shows that in conditions of faster growth rate in a country than abroad, the domestic economy can't be competitive in the international market. Implementation of appropriate exchange rate regime inevitably leads to problems of exchange rate changes on import prices and inflation. The research aims to demonstrate the interdependence of inflation and depreciation, and the fact that the general price level increase is a main factor that hinders the realization of the positive effects of the national currency depreciation. Unstable monetary situation in the country undermines the goal of stimulating exports through an increase in the nominal exchange rate and by reducing export prices in foreign currency. Export becomes uncompetitive, while the depreciation of the national currency is quickly spread to inflation through the exchange rate pass-through.

scholarly journals The Long-run and Short-run Impact of Exchange Rate Devaluation on Pakistan’s Trade Performance

2002 ◽  
Vol 41 (3) ◽  
pp. 277-286 ◽  
Author(s):  
Zehra Aftab ◽  
Aurangzeb .
Keyword(s):  
Exchange Rate ◽  
Quarterly Data ◽  
Exchange Rate Dynamics ◽  
Trade Performance ◽  
Trade Elasticities ◽  
Long Run ◽  
J Curve ◽  
Trading Partners ◽  
Short Run

In estimating trade elasticities for Pakistan, most previous researchers have employed non-stationary data and OLS or 2SLS techniques. In this paper we use Johansen’s cointegration methodology to re-investigate the long-run trade elasticities and existence of the Marshall-Lerner condition. Using quarterly data, the trade performance with Pakistan’s ten major trading partners is empirically tested. Moreover, we also investigate the short-run exchange rate dynamics by constructing an error-corrrection model to trace the j-curve.

IS THERE J-CURVE EFFECT IN THE COMMODITY TRADE OF SINGAPORE WITH MALAYSIA? AN EMPIRICAL STUDY

2018 ◽  
Vol 63 (03) ◽  
pp. 567-591
Author(s):  
MOHSEN BAHMANI-OSKOOEE ◽  
HANAFIAH HARVEY
Keyword(s):  
Exchange Rate ◽  
Trade Balance ◽  
Commodity Trade ◽  
Long Run ◽  
J Curve ◽  
Trading Partners ◽  
Short Run ◽  
Exchange Rate Changes ◽  
Small Industries ◽  
The Impact

A previous study that investigated the impact of exchange rate changes on the trade balance of Singapore with each of its 13 largest trading partners on bilateral basis found significant long-run effects in four out of 13 cases. In the trade balance between Singapore and Malaysia as a major partner, the real exchange rate had neither short-run nor long-run significant effects. To reduce the aggregation bias, in this paper, we disaggregate the trade flows between the two countries by industry and consider the trade balance of each of the 136 industries that trade between the two countries. We find that the trade balance of 79 industries are affected by exchange rate changes in the short run. However, short-run effects last into the long run in only 19 industries which mostly happen to be small industries.

scholarly journals The Effect of Real Exchange Rate Changes on External Trade Balance in Sudan: Testing J-Curve Hypothesis

2020 ◽  
Vol 6 (16) ◽  
pp. 3-23
Author(s):  
Ahmed Abdu Allah IBRAHIM ◽  
◽  
Mohamed Sharif BASHIR ◽  
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Granger Causality ◽  
Trade Balance ◽  
Granger Causality Test ◽  
Additional Contribution ◽  
External Trade ◽  
Causality Test ◽  
J Curve ◽  
The Impact

The current research article analyzes the impact of changes in real exchange rate upon external trade balance of Sudan during the period 1978-2017. It employs Autoregressive Distributed Lag (ARDL) approach, impulse response functions and Granger causality test. The empirical findings indicate that exchange rate devaluations have no impact on the merchandize trade balance, thus evidence in favor of the J-curve pattern was not found. Granger causality test runs one-way from trade ratio to real exchange rate and not the other way. Thus, the results can be considered as an additional contribution to evidence stated in literature that focused a vibrant range of economies. These findings are appropriate for policy making in Sudan as well as in various developing countries since the focal point is major trade balance deficit.

The influence of inflation targeting on the pass-through effect of the exchange rate

2018 ◽  
pp. 70-84
Author(s):  
Ph. S. Kartaev ◽  
Yu. I. Yakimova
Keyword(s):  
Developing Countries ◽  
Monetary Policy ◽  
Exchange Rate ◽  
Inflation Targeting ◽  
Policy Regime ◽  
Short And Long Term ◽  
The Exchange Rate ◽  
Pass Through ◽  
The Impact

The paper studies the impact of the transition to the inflation targeting regime on the magnitude of the pass-through effect of the exchange rate to prices. We analyze cross-country panel data on developed and developing countries. It is shown that the transition to this regime of monetary policy contributes to a significant reduction in both the short- and long-term pass-through effects. This decline is stronger in developing countries. We identify the main channels that ensure the influence of the monetary policy regime on the pass-through effect, and examine their performance. In addition, we analyze the data of time series for Russia. It was concluded that even there the transition to inflation targeting led to a decrease in the dependence of the level of inflation on fluctuations in the ruble exchange rate.

Open Door System and Endogenous Growth in Indian Economy: An Empirical Analysis on the Role of Human Capital and R&D in Explaining Industrial Productivity

2021 ◽  
Vol 46 (1) ◽  
pp. 24-37
Author(s):  
Arjun K. ◽  
Sanjay Kumar ◽  
A. Sankaran ◽  
Mousumi Das
Keyword(s):  
Human Capital ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Endogenous Growth ◽  
Value Added ◽  
Capital Formation ◽  
Knowledge Capital ◽  
Test Technique ◽  
Long Run ◽  
The Impact

The present study investigates the impact of human capital, knowledge capital which is a function of human capital, and real exchange rate scenario in explaining long-run industrial total factor productivity (TFP) from 1980 to 2015 on the theoretical basis of the open endogenous growth model. The variables employed in the contemporary study include manufacturing value added (MNVA) as industrial output measure, gross fixed capital formation (GFCF) as a measure of capital and labour input which is measured using employment data. Gross enrolment ratio (GER) is taken as a measure for human capital formation, expenditure on research and development (R&D) as a proxy for knowledge capital, and real exchange rate indicates global economic shocks. The study involves estimating TFP for Industrial Sector during the post-liberalization period by employing Cobb-Douglas production function. The ARDL bounds test technique for cointegration revealed long-run relation among the varying factors studied. The Toda-Yamamoto causality test concluded bi-directional causality running between, R&D expenditure and Industrial TFP which sends a strong signal to the policymakers for a well-framed long-term integrated approach for human & knowledge capital formation which will act as a strong impetus for manufacturing firms to come up in terms of augmenting production and productivity and expanding foreign market horizon. JEL Classification: D24, E2, J24

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