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Article
Publication date: 14 September 2015

Nazif Durmaz

– The purpose of this paper is to examine the J-Curve effect in Turkey at the industry level.

Abstract

Purpose

The purpose of this paper is to examine the J-Curve effect in Turkey at the industry level.

Design/methodology/approach

In order to find the long-run and short-run effects, 58 industries (by Standard International Trade Classification Rev.3) have been identified by using monthly data that covers the periods from January 1990 to December 2012. Present study employs bounds testing procedure, developed by Pesaran and Shin (1999) and Pesaran et al. (2001).

Findings

Although results indicate a positive satisfactory effect of real depreciation of lira in 13 industries, the J-Curve effect is detected in only 13 industries.

Originality/value

The present study is one of the first studies to analyze the J-Curve effect at the industry level on Turkey. In addition to being one of the first studies, it will be an invaluable addition to the J-Curve literature.

Details

Journal of Economic Studies, vol. 42 no. 4
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 2 November 2010

Mohsen Bahmani‐Oskooee and Scott W. Hegerty

Since the introduction of the concepts of the J‐ and S‐curves, many researchers have tried to verify their validity empirically. This paper aims to review the related…

Abstract

Purpose

Since the introduction of the concepts of the J‐ and S‐curves, many researchers have tried to verify their validity empirically. This paper aims to review the related papers and to offer direction for future research.

Design/methodology/approach

This is a review paper. As such, no method is employed here. Rather, the methodologies used by others to test the J‐ and S‐curves are explained and reviewed.

Findings

No new findings are offered since this is a review paper.

Practical implications

The J‐ and S‐curves show whether currency depreciation worsens the trade balance first before improving it. Since the majority of studies are country‐specific, policymakers could benefit by learning whether currency depreciation will be effective in improving the trade balance.

Originality/value

This is a literature review paper and its originality is in terms of collecting the literature together and presenting it in one single paper.

Details

Journal of Economic Studies, vol. 37 no. 6
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 10 August 2015

Mohsen Bahmani-Oskooee and Hadise Fariditavana

Previous research that investigated the effects of currency depreciation on the trade balance assumed that the adjustment of all variables in a given model is in linear…

Abstract

Purpose

Previous research that investigated the effects of currency depreciation on the trade balance assumed that the adjustment of all variables in a given model is in linear fashion. The authors wonder if introduction of nonlinearity in the adjustment of some variables such as the exchange rate can shed additional light on evidence of the J-curve. The new approach also allows to test whether exchange rate changes have symmetric or asymmetric effects on the trade balance. Estimates of a trade balance model for Canada, China, Japan, and the USA reveal that the effects are indeed asymmetric. The paper aims to discuss these issues.

Design/methodology/approach

The methodology is based on linear and nonlinear ARDL approach.

Findings

When nonlinearity is introduced into testing approach for the J-curve, more evidence is found in support of the J-curve.

Research limitations/implications

The models are estimated using aggregate trade flows of each country with the rest of the world, hence they suffer from aggregation bias. Using trade flows at bilateral level and at commodity level are highly recommended for future research.

Originality/value

This is the first paper that applies nonlinear ARDL approach to test the short-run and long-run effects of currency depreciation on the trade balance.

Details

Journal of Economic Studies, vol. 42 no. 3
Type: Research Article
ISSN: 0144-3585

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Article
Publication date: 26 October 2012

Charalambos Pattichis

The purpose of this paper is to use disaggregated data on US‐UK trade to investigate the effects of exchange rate depreciation on trade in services both in the short‐ and long‐run.

Abstract

Purpose

The purpose of this paper is to use disaggregated data on US‐UK trade to investigate the effects of exchange rate depreciation on trade in services both in the short‐ and long‐run.

Design/methodology/approach

The paper focuses on the three traditional categories of internationally traded services – travel, passenger fares and other transportation services – and employs the “bounds” testing procedure advanced by Pesaran, Shin and Smith to investigate the J‐curve effect.

Findings

The results reveal that the real exchange rate has a statistically significant effect on trade in services in at least one of the time periods. The results also provide some support for the J‐curve effect.

Practical implications

Empirical evidence on the J‐curve provides policymakers with valuable information about the effects of currency depreciation on the trade balance.

Originality/value

To the best of the author's knowledge this is the first paper to investigate the J‐curve effect using data on trade in services.

Details

Journal of Economic Studies, vol. 39 no. 6
Type: Research Article
ISSN: 0144-3585

Keywords

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Book part
Publication date: 30 January 1995

Kanta Marwah

Abstract

Details

Economics, Econometrics and the LINK: Essays in Honor of Lawrence R.Klein
Type: Book
ISBN: 978-0-44481-787-7

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Article
Publication date: 22 May 2007

Ferda Halicioglu

The purpose of this paper is to study empirically the dynamics of Turkish bilateral trade between Turkey and her nine trading partners, in addition to aggregate trade balance data.

Abstract

Purpose

The purpose of this paper is to study empirically the dynamics of Turkish bilateral trade between Turkey and her nine trading partners, in addition to aggregate trade balance data.

Design/methodology/approach

The paper employs cointegration, generalized impulse response analysis, and stability tests.

Findings

The empirical results suggest non‐existence of the J‐curve effect at disaggregate and aggregate levels. However, Marshall‐Lerner condition holds for the aggregate data along with some of the trading partners. With regard to the stability of trade balance equations, the findings are mixed.

Practical implications

Conclusions drawn from this study could be useful for the policy makers of governments and practitioners in international trade organizations.

Originality/value

This paper extends the existing literature by providing initial evidence at disaggregate data in the case of Turkey. Moreover, for the first time disaggregate and aggregate data are utilized in the same analysis.

Details

Journal of Economic Studies, vol. 34 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 1 October 1996

Helmut Wagner

Notes that most of the reforms in Eastern European countries have been piecemeal and have not constituted a comprehensive programme. Describes what a comprehensive…

Abstract

Notes that most of the reforms in Eastern European countries have been piecemeal and have not constituted a comprehensive programme. Describes what a comprehensive programme consists of, why a J‐curve in output and employment arises and what consequences it has. Discusses the possibilities and limitations of external help to avoid a structural extension of this J‐curve problem. Notes that a comprehensive transformation programme includes institutional innovations as well as monetary disinflation policy, which produces recessionary J‐curve‐like output and employment costs. Also that effects of anticipatory recessions, based on anticipated future expenditures of western countries for rebuilding eastern economies (or for preventing economic decline and political disorder), may arise.

Details

International Journal of Social Economics, vol. 23 no. 10/11
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 4 May 2020

Mohsen Bahmani-Oskooee and Augustine Chuck Arize

The purpose is to assess the asymmetric effects of exchange rate changes on the trade balance using data from African nations.

Abstract

Purpose

The purpose is to assess the asymmetric effects of exchange rate changes on the trade balance using data from African nations.

Design/methodology/approach

The methodology is based on the most recent development in asymmetry cointegration and error-correction modeling.

Findings

While the authors find short-run asymmetric effects in many of the countries in their sample, asymmetry cointegration yields support for the new definition of the J-curve in Algeria, Cameroon, Ethiopia, Morocco, Tanzania and Zambia.

Originality/value

This is the first study that applies nonlinear ARDL approach of Shin et al. (2014) using data from each of the 13 countries in Africa.

Details

Journal of Economic Studies, vol. 47 no. 5
Type: Research Article
ISSN: 0144-3585

Keywords

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Article
Publication date: 18 February 2021

Cheng-Jun Wang and Jonathan J.H. Zhu

Social influence plays a crucial role in determining the size of information diffusion. Drawing on threshold models, we reformulate the nonlinear threshold hypothesis of…

Abstract

Purpose

Social influence plays a crucial role in determining the size of information diffusion. Drawing on threshold models, we reformulate the nonlinear threshold hypothesis of social influence.

Design/methodology/approach

We test the threshold hypothesis of social influence with a large dataset of information diffusion on social media.

Findings

There exists a bell-shaped relationship between social influence and diffusion size. However, the large network threshold, limited diffusion depth and intense bursts become the bottlenecks that constrain the diffusion size.

Practical implications

The practice of viral marketing needs innovative strategies to increase information novelty and reduce the excessive network threshold.

Originality/value

In all, this research extends threshold models of social influence and underlines the nonlinear nature of social influence in information diffusion.

Details

Internet Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1066-2243

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Article
Publication date: 14 May 2018

Muhammad Ali Nasir and Justine Simpson

The purpose of this paper is to analyse the implications of exchange rate depreciation for inflation targeting and trade balance of UK in the context of the Brexit epoch.

Abstract

Purpose

The purpose of this paper is to analyse the implications of exchange rate depreciation for inflation targeting and trade balance of UK in the context of the Brexit epoch.

Design/methodology/approach

The study employed a time-varying structural vector auto-regression (TVSVAR) model framework in which the sources of time variation were both the coefficients and variance-covariance matrix of the innovations on the data from January 1989 to September 2016.

Findings

The findings suggest that the depreciation of the Stirling has significant effects on inflation and trade balance in UK in context of Brexit epoch. It also showed that such a depreciation can be helpful in the improvement of external balance as well as steering the inflation to its statutory target. Despite, the inflation targeting, there is strong evidence of a pass-through.

Research limitations/implications

Research has profound implications in terms of the sharp depreciation of GBP associated with the Brexit outcome. The study is very topical and could be very interesting to the readership of JES as well as wider audience. The study has limitations in a context that the significance of the results and association of the under analysis entities is contingent on the future trade relationships and Channel between UK and EU. Therefore, although there is a lot of uncertainty about the future of Britain trade relationships, this study provides guidance on the importance of exchange rate channel if the similar trade arrangements prevails in the post-Brexit era.

Practical implications

The research has profound practical implications, using a TVSVAR model in which the relationship among the entities varies over time; it has shown the importance of exchange rate in terms of external balance and inflation targeting. Hence, it has appeal for the practitioners as well as academics.

Social implications

The research has great social implications. The Brexit is the biggest political and economic event of this era for UK and EU. There are big questions about the relationship between UK and EU in the post-Brexit epoch as well as questions about the future of the European integration. In this context, this study has shown that how the exchange rate could play an important role for the UK economy when its contemporary trade channels prevail. Concomitantly, it has social implications particularly for the European society.

Originality/value

The research is an original piece of work. It has contributed to the debate on the exchange rate deprecation, external balance and inflation targeting in context of the Brexit associated sharp depreciation of Stirling. It has used a framework, i.e. TVSVAR, which also have unique features in terms of testing the associations among under analysis entities against time.

Details

Journal of Economic Studies, vol. 45 no. 2
Type: Research Article
ISSN: 0144-3585

Keywords

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