Long-Run Determinants and Short-Run Dynamics of the Trade Balance in the Eu-15 Countries

Analysis of the New Kuznets Relationship: Considering Emissions of Carbon, Methanol, and Nitrous Oxide Greenhouse Gases—Evidence from EU Countries

International Journal of Environmental Research and Public Health ◽

10.3390/ijerph18062907 ◽

2021 ◽

Vol 18 (6) ◽

pp. 2907

Author(s):

Mara Madaleno ◽

Victor Moutinho

Keyword(s):

Nitrous Oxide ◽

Least Squares ◽

Fixed Effects ◽

Ghg Emissions ◽

Ordinary Least Squares ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

Long Run ◽

Short Run ◽

The Eu

Decreased greenhouse gas emissions (GHG) are urgently needed in view of global health threat represented by climate change. The goal of this paper is to test the validity of the Environmental Kuznets Curve (EKC) hypothesis, considering less common measures of environmental burden. For that, four different estimations are done, one considering total GHG emissions, and three more taking into account, individually, the three main GHG gases—carbon dioxide (CO2), nitrous oxide (N2O), and methane gas (CH4)—considering the oldest and most recent economies adhering to the EU27 (the EU 15 (Old Europe) and the EU 12 (New Europe)) separately. Using panel dynamic fixed effects (DFE), dynamic ordinary least squares (DOLS), and fully modified ordinary least squares (FMOLS) techniques, we validate the existence of a U-shaped relationship for all emission proxies considered, and groups of countries in the short-run. Some evidence of this effect also exists in the long-run. However, we were only able to validate the EKC hypothesis for the short-run in EU 12 under DOLS and the short and long-run using FMOLS. Confirmed is the fact that results are sensitive to models and measures adopted. Externalization of problems globally takes a longer period for national policies to correct, turning global measures harder and local environmental proxies more suitable to deeply explore the EKC hypothesis.

Download Full-text

Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

International Journal of Economics and Finance ◽

10.5539/ijef.v8n4p8 ◽

2016 ◽

Vol 8 (4) ◽

pp. 8 ◽

Cited By ~ 1

Author(s):

Mehmet Demiral

Keyword(s):

Exchange Rate ◽

Trade Balance ◽

Real Effective Exchange Rate ◽

Series Data ◽

Adjustment Process ◽

Industry Trade ◽

Long Run ◽

Effective Exchange ◽

Short Run ◽

Effective Exchange Rate

This study re-examines the determinants of Turkey’s trade balance in its manufactures trade with 33 OECD-member countries for the short-run and the long-run. Unlike other studies, in the relationships we also control the moderating effects of the availability of import substitutes proxied by intra-industry trade. We analyze quarterly aggregated time-series data of the period spanning from 1998.QI to 2015.QIII, following the autoregressive distributed lag (ARDL) bounds testing approach to the cointegration and the error correction modeling. Estimation results reveal that real effective exchange rate, together with domestic and foreign incomes are still among the core determinants of Turkey’s trade balance in the manufacturing sectors. There is no significant impact of domestic final oil prices that also include all the taxes on gasoline. The trade balance depends on domestic income negatively and the aggregated income of the OECD countries positively. The finding that real depreciation of Turkish lira against to those of Turkey’s OECD trade partners improves trade balance in both the short-run and the long-run, indicates no evidence of J-curve adjustment process. Unsurprisingly, the intra-industry trade seems to be an important factor that moderates the elasticities of trade balance to its determinants, especially to real effective exchange rate and domestic income. Overall results underline the importance of import-substitution capability besides the export-oriented production to ease the longstanding large trade deficits for Turkey.

Download Full-text

The Effect of Real Exchange Rate on Trade Balance in a Resource-Rich Economy: The Case of Mongolia

Foreign Trade Review ◽

10.1177/0015732518797184 ◽

2018 ◽

Vol 53 (4) ◽

pp. 211-224 ◽

Cited By ~ 2

Author(s):

Gan-Ochir Doojav

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Trade Balance ◽

Developing Economies ◽

Jel Classification ◽

Vector Error Correction ◽

Vector Error ◽

Long Run ◽

Short Run ◽

Exchange Rate Depreciation

For resource-rich developing economies, the effect of real exchange rate depreciation on trade balance may differ from the standard findings depending on country specific characteristics. This article employs vector error correction model to examine the effect of real exchange rate on trade balance in Mongolia, a resource-rich developing country. Empirical results show that exchange rate depreciation improves trade balance in both short and long run. In particular, the well-known Marshall–Lerner condition holds in the long run; however, there is no evidence of the classic J-curve effects in the short run. The results suggest that the exchange rate flexibility may help to deal effectively with current account deficits and exchange rate risk. JEL Classification: C32, C51, F14, F32

Download Full-text

Research On Monetary Neutrality: Evidence From Exchange Rate And Trade Balance Of G-7 Countries

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v24i2.1351 ◽

2011 ◽

Vol 24 (2) ◽

Cited By ~ 1

Author(s):

Doh-Khul Kim

Keyword(s):

Exchange Rate ◽

Real Exchange Rate ◽

Trade Balance ◽

Monetary Shocks ◽

Font Size ◽

Long Run ◽

Short Period ◽

Short Run ◽

Monetary Neutrality ◽

Nominal Shocks

According to a recent paper by Fisher and Huh (2002), in contrast to a long-run neutrality hypothesis, nominal shocks have long-run effects on a country’s real exchange rate and trade balance. However employing a similar method (VAR) with identical restrictions (long-run neutrality and short-run recursive hypotheses), this paper shows that the effects on the real exchange rate are much shorter in this G-7 country study than what Fisher and Huh (2002) contend. Further, the trade balance improves for a short period of time, from which it can conclude there is a shorter existence of the depreciation effect in response to expansionary monetary shocks, which supports the long-run neutrality hypothesis in an open macroeconomic framework.

Download Full-text

Economic and financial integration in emerging markets: A European policy

Economic Annals ◽

10.2298/eka0564081t ◽

2005 ◽

Vol 50 (164) ◽

pp. 81-102

Author(s):

Theodore Theodoropoulos ◽

Borut Vojinovic

Keyword(s):

Emerging Markets ◽

Financial Integration ◽

Institutional Framework ◽

European Policy ◽

Eu Accession ◽

Long Run ◽

Short Run ◽

Mature Market ◽

The Eu ◽

Cyclical Volatility

This paper extends to test if the same short-run increase in cyclical volatility arising from financial integration is observed in this specific sample of "emerging markets". This work finds signs that, contrary to other emerging markets, this does not happen: for the future member states financial integration, similarly to the outcome observed in mature market economies, reduces cyclical volatility both in the short and in the long run. Weak indications are found that this may happen partially due to the anchoring of expectations provided by the EU Accession, and to the more robust institutional framework imposed by this process onto the countries in question.

Download Full-text

Investigating in the J-curve phenomenon in Tunisia- ARDL bound test approach

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v12i5(j).3077 ◽

2020 ◽

Vol 12 (5(J)) ◽

pp. 23-32

Author(s):

Elham Shubaita ◽

Muhammad Mar’i ◽

Mehdi Seraj

Keyword(s):

Trade Balance ◽

Real Exchange Rates ◽

Distributed Model ◽

Long Run ◽

J Curve ◽

Short Run ◽

Using Data ◽

Bound Test ◽

The Relationship ◽

Ardl Bound Test

This paper investigates the relationship between trade balance, real exchange rates, and incomes in Tunisia by adopting the autoregressive distributed model (ARDL) by using data over the period of 1980 to 2018. We also used the bound test cointegration between variables at a 10% significant level. Our findings show that the Tunisia economy does not match the Marshall-Lerner condition in the long run, that provides an accurate description of the particular situation for which a country currency devaluation or depreciation its currency under both fixed or floating regime is predicted to enhance the trade balance of a country, which means there is no j-curve phenomenon in the long run, which tries to differentiate between the change of short-run and long-run effects in the change of exchange rate on the trade balance. Our findings match the Marshall-Lerner condition in the short run and can confirm the existing j-curve in the case of Tunisia.

Download Full-text

Different Approaches to Merchandise Trade Balance in Pakistan

Global Business Management Review (GBMR) - Vol 12 No 2 (2020): Global Business Management Review ◽

10.32890/gbmr2020.12.2.2 ◽

2020 ◽

Vol 12 (Number 2) ◽

pp. 19-30

Author(s):

Yousuf Aboya ◽

Arsalan Hussain ◽

Rohail Hassan ◽

Hassan Mujtaba Nawaz Saleem ◽

Aamir Hussain Siddiqui

Keyword(s):

Exchange Rate ◽

Trade Balance ◽

Trade Deficit ◽

Real Effective Exchange Rate ◽

Series Data ◽

Long Run ◽

Effective Exchange ◽

Short Run ◽

Merchandise Trade ◽

Effective Exchange Rate

The current study empirically examines the three major approaches to trade balance for Pakistan by utilizing the yearly data from 1972 to 2016. Monetary, elasticity, and absorption approaches were tested by developing a model that incorporates all three approaches. The significant contribution of the study is that it uses only the merchandise trade deficit account, which includes trade of only physical goods. The study used time-series data; therefore, variables have been tested for the stationarity, and it is found that there is a combination of I (0) and I (1) variables, so ARDL bounds testing approach to co-integration has been employed to find the short run and long run associations among the variables. The bound test results discovered that there is a presence of stable long-term association among the merchandise trade deficit account, real broad money supply, real effective exchange rate, and real domestic absorption. The results further revealed that merchandise trade discrepancy is determined purely by the real effective exchange rate, which specifies that the exchange rate's devaluation increases the deficit in the long run whereas in the short-run increase in domestic absorption decreases the merchandise trade deficit.

Download Full-text

Short-run and long-run effects of exchange rate change on trade balance: Evidence from China and its trading partners

Japan and the World Economy ◽

10.1016/j.japwor.2012.07.001 ◽

2012 ◽

Vol 24 (4) ◽

pp. 266-273 ◽

Cited By ~ 19

Author(s):

Chun-Hsuan Wang ◽

Chun-Hung A. Lin ◽

Chih-Hai Yang

Keyword(s):

Exchange Rate ◽

Trade Balance ◽

Rate Change ◽

Exchange Rate Change ◽

Long Run ◽

Trading Partners ◽

Short Run

Download Full-text

The long run relationship between fish production, marine trade balance and foreign direct investment

Maritime Business Review ◽

10.1108/mabr-01-2020-0008 ◽

2020 ◽

Vol 5 (3) ◽

pp. 271-280

Author(s):

Naseem H. Jamei ◽

Mira Nurmakhanova ◽

Shahbaz Mustafa ◽

Alloysius Egbulonu ◽

Wagdi Hadidan

Keyword(s):

Foreign Direct Investment ◽

Trade Balance ◽

Direct Investment ◽

Design Methodology ◽

Fish Production ◽

Content Type ◽

Gulf Countries ◽

Long Run ◽

Short Run ◽

The Impact

Purpose This paper aims to focus on testing the long-run relationship between fish production and two main variables, the foreign direct investment inflow and the marine trade balance in Oman, which is one of the Arab Gulf countries, during the period 1985-2016. Design/methodology/approach This study uses what known as the two-step Engle–Granger cointegration test to give evidence for the long-run relationship among the variables. Findings The results show that there are a negative long- and short-run relations between fish production and marine trade balance; moreover, any shocks will be corrected within two periods at the most. Originality/value This study is one of few studies in using the econometric models to study the impact of fish production on marine trade balance and foreign direct investment.

Download Full-text

Are EU Members’ Economies an “Engine” of the EU Candidates’ Economies?

Folia Oeconomica Stetinensia ◽

10.2478/foli-2021-0018 ◽

2021 ◽

Vol 21 (2) ◽

pp. 97-117

Author(s):

Marija Radulović ◽

Milan Kostić

Keyword(s):

Developing Country ◽

Positive Impact ◽

Positive Influence ◽

Economic Benefits ◽

Developed Country ◽

Economic Relations ◽

Long Run ◽

Short Run ◽

The Eu

Abstract Research background: Economic relations between countries members of the EU and EU candidates are very strong. Germany and France have the leading economies of the EU, are in the top ten economies worldwide, and drivers of EU development. Serbia has strong economic relations with Germany and France, especially with Germany. Therefore, it is necessary to examine whether Germany and France impact the development of Serbia. Purpose: The purpose of the study is to determine if there is a positive influence of a developed country on a developing country. The aim of the paper is to determine whether there is a long- and short-term positive relationship between Germany and France (EU members) and the Serbian economy (EU candidate). Research methodology: A Vector Error Correction Model is used to analyze quarterly data from 2002Q2 to 2018Q2. Results: The results showed a statistically significant long-term relationship between Germany and France and Serbia’s real GDPs, so EU members have a long-term positive impact on the economy of EU candidates. In the case of the French, there is a short-run positive impact on the Serbian economy. For Germany, it is not the case. Novelty: This paper fills the literature gap about the influence of a developed country on a developing country. Recommendations for policymakers in EU candidates could be that if they want to motivate people to accept the process of access to the EU, they must provide them with more information about long-run economic benefits from the association to the EU.

Download Full-text