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This study aims to examine the symmetric and asymmetric impact of external debt on inflation in Sudan from 1970 to 2020 within a multivariate framework by including money supply and the nominal effective exchange rate as additional inflation determinants.

The authors utilize an Auto Regressive Distributed Lag (ARDL) model to examine the symmetric impact of external debt on inflation, while the asymmetric impact is examined using a Nonlinear ARDL (NARDL) model. The existence of a long-run relationship between inflation and external debt is tested using the bounds-testing approach to cointegration, and a vector error-correction model is estimated to determine the short parameters of equilibrium dynamics.

The linear ARDL model results show that external debt has no statistically significant impact on inflation in the long run. On the contrary, the results of the NARDL model show that positive and negative external debt shocks statistically affect inflation in the long run. The estimated long-run elasticity coefficients of the linear and nonlinear ARDL models reveal that the domestic money supply has a statistically significant positive impact on inflation. In contrast, the nominal effective exchange rate has a statistically significant negative impact on inflation.

The reliance on symmetric analysis may not be sufficient to uncover the existence of a linkage between external debt and inflation. Proper external debt management is crucial to control inflation rates in Sudan.

To date, no empirical study has assessed the external debt-inflation nexus and its potential asymmetry in Sudan, and the current study aims to fill this gap in the literature.

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.

The methodology is based on linear and nonlinear ARDL approach.

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

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.

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.

Individuals' health is considered one of the major determinants of higher levels of productivity and economic development. Over the past century, the widespread occurrence of human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS) has been a serious threat to economic development around the globe and has caused a dramatic fall in the life expectancy rate in many nations. This is the first study that examines the impact of HIV prevalence on health expenditure at the national level employing two linear and nonlinear autoregressive distributed lag (ARDL) models and simultaneously tests the long-run and short-run relationship for five selected developed countries. The authors employ annual data from 1981 to 2016. They find that HIV prevalence has a significant impact on health expenditure in the short-run and long-run in all five countries using the linear model and four of the countries in the nonlinear model. They find that HIV/AIDS prevalence has a significant short-run and long-run asymmetric impact on health expenditure of almost all selected developed economies.

The authors are employing two linear and nonlinear ARDL models and simultaneously test the long-run and short-run relationship for five selected developed countries.

The authors find that HIV/AIDS prevalence has a significant short-run and long-run asymmetric impact on health expenditure of almost all selected developed economies.

To the best of the authors’ knowledge, this is the first research work that empirically examines the link between HIV prevalence and health expenditure for this group of countries using linear and nonlinear ARDL approach for short run and long run.

The purpose of this paper is to examine the relationship between financial inclusion (FI) and economic growth in India.

To measure FI, a multidimensional time-varying index is proposed following the Human Development Index method. The long-run relationship between FI and economic growth is examined by using the autoregressive distributed lag (ARDL) approach to cointegration and nonlinear ARDL approach. Further, the direction of causality is investigated by employing the Toda–Yamamoto Granger causality test.

The linear cointegration test confirms a long-run relationship between FI and economic growth for India. The improvement in both demand-side and supply-side financial services has a positive impact on economic growth. These results suggest that India can attain long-run economic growth by improving the coverage of FI. However, there is no evidence of nonlinear cointegration, indicating that there is no asymmetric effect of FI on economic growth. Further, the causality test shows that FI granger causes economic growth but not vice versa.

The major limitation of the study is the availability of time series data for all important variables. The index for both demand- and supply-side indicators can be extended with several other important variables in later date once the data are available for those variables.

As the study confirms that FI is one of the main drivers of economic growth, it is suggested that the policy maker emphasizing on financial sector reforms can enjoy economic growth in the long run, especially in developing countries. Therefore, the government and policy makers need to address the issues involved in access to financial services to spur economic growth.

The study examines the long-run relationship between FI and economic growth employing ARDL bound testing approach and nonlinear ARDL approach, separately for demand-side and supply-side indicators. Further, the study uses the Toda–Yamamoto granger causality to find the direction of causal flow between FI and economic growth.

In this paper we examine the validity of the J-curve hypothesis in four Southeast Asian economies (Indonesia, Malaysia, the Philippines and Thailand) over the 1980–2017 period.

We employ the linear autoregressive distributed lags (ARDL) model that captures the dynamic relationships between the variables and additionally use the nonlinear ARDL model that considers the asymmetric effects of the real exchange rate changes.

The estimated models were diagnostically sound, and the variables were found to be cointegrated. However, with the exception of Malaysia, the short- and long-run relationships did not attest to the presence of the J-curve effect. The trade flows were affected asymmetrically in Malaysia and the Philippines, suggesting the appropriateness of nonlinear ARDL in these countries.

The previous research tended to examine the effects of the real exchange rate changes on the agricultural trade balance and specifically the J-curve effect (deterioration of the trade balance followed by its improvement) in the developed economies and rarely in the developing ones. In this paper, we address this omission.

This paper aims to explain real exchange rate fluctuations by means of a model including both standard fundamentals and two alternative measures of inflation expectations for five inflation targeting countries (the UK, Canada, Australia, New Zealand and Sweden) over the period January 1993–July 2019.

Both a benchmark linear autoregressive distributed lag (ARDL) model and a nonlinear autoregressive distributed lag (NARDL) specification are considered.

The results suggest that the nonlinear framework is more appropriate to capture the behaviour of real exchange rates given the presence of asymmetries both in the long and short run. In particular, the speed of adjustment towards the purchasing power parity (PPP) implied long-run equilibrium is three times faster in a nonlinear framework, which provides much stronger evidence in support of PPP. Moreover, inflation expectations play an important role, with survey-based ones having a more sizable effect than market-based ones.

The focus on linearities and the estimation of a NARDL model, which is shown to outperform the linear ARDL model both within sample and out of sample, is an important contribution to the existing literature which has rarely applied this type of framework; the choice of an appropriate econometric method also makes the policy implications of the analysis more reliable; in particular, monetary authorities should aim to achieve a high degree of credibility to manage them and thus currency fluctuations effectively; the inflation targeting framework might be especially appropriate for this purpose.

As one of the world's most valuable traded commodities, the market for coffee beans has grown enormously in recent years. The paper aims on analyzing the nonlinear exchange rate pass-through in Turkish coffee bean imports from two important sources in South America: Brazil and Colombia.

Data collected in this paper through reliable channels include nominal import value, exchange rate, production of total industry, etc. Independent and dependent variables are obtained through conversion. Since the nonlinearly adjusted exchange rate differs significantly from the linearly adjusted one for the export trade of Brazilian coffee beans, this paper develops the autoregressive distributed lag (ARDL) and nonlinear ARDL frameworks and demonstrates their application through asymmetric cointegration and error correction models.

The results of this paper show that imports of Brazilian coffee bean exhibit a more dramatic asymmetry compared to Colombia's coffee bean imports. The results of this study contribute to the import trade of non-oil commodities in developing countries, particularly Brazil, and enrich the existing literature on nonlinear exchange rate adjustments.

The export of Colombian coffee beans is not as old as Brazil, and it was not until much later that Colombia began to export coffee beans to the rest of the world.

The present study is an addition to the literature of agricultural trade. The authors analyze the nonlinear exchange rate pass-through in Turkish coffee bean imports from two important sources in South America: Brazil and Colombia. Different from the current mainstream research on oil commodity trade, this paper focuses on international trade from the perspective of coffee beans, which can enlighten the practice in this field.

This paper aims to investigate the presence of the Fisher effect for the USA from a new methodological perspective differing it from all previous studies using the common linear representation of the Fisher equation.

The nonlinear ARDL model, recently developed by Shin et al. (2014), is applied for the 10-year US Government bond rates over the period of 1985M1-2017M10.

The empirical findings indicate that the US Federal Reserve (FED) is a more predominant arbiter in the determination of interest rates during periods of declining inflation rates than periods of rising inflation rates. This finding may allow the FED to apply more proactive and prudent monetary policy. Additionally, this study newly describes and introduces a different version of the partial Fisher effect and extends the Fisher equation to some degree in terms of the partial Fisher effect.

To the best the authors’ knowledge, this method is applied for the first time in testing the Fisher effect for the USA.

The purpose of this paper is to show that in some industries the linear model may not reveal any significance link between exchange rate volatility and trade flows but once nonlinear adjustment of exchange rate volatility is introduced, the nonlinear model reveals significant link.

This paper uses the linear ARDL approach of Pesaran et al. (2001) and the nonlinear ARDL approach of Shin et al. (2014) to assess asymmetric effects of exchange rate volatility on trade flows between Germany and Turkey.

This paper consider the experiences of 75 2-digit industries that trade between Turkey and Germany. When the study assumed the effects of volatility to be symmetric, the study found short-run effects in 31 (30) Turkish (German) exporting industries that lasted into the long run in only 10 (13) Turkish (German) exporting industries. However, when the study assumed asymmetric effects and relied upon a nonlinear model, the study found short-run asymmetric effects of volatility on exports of 55 (56) Turkish (German) industries. Short-run asymmetric effects lasted into long-run asymmetric effects in 10 (25) Turkish (German) exporting industries. All in all, we found that almost 25% of trade is hurt by exchange rate volatility.

This is the first paper that assesses the possibility of asymmetric effects of exchange rate volatility on German–Turkish commodity trade.

This paper aims to examine the effects of the real exchange rate on trade balance in Algeria and investigates whether it represents a viable tool to sustain and improve trade performance using the nonlinear autoregressive distributed lag (NARDL) estimation technique and data from Algeria over the period 1980–2018. This study also highlights the role of trading partners with large income endowments in enhancing the trade balance.

The NARDL model is used to unveil potential short and long run nonlinear responses of the trade balance to shocks in real exchange rates and detect whether these responses are different in terms of sign and magnitude. The paper also provides a dynamic multiplier analysis that tests the existence of a J-Curve pattern in Algeria with several policy recommendations.

The findings confirm the existence of a J-curve pattern in Algeria where domestic currency depreciation will worsen the trade balance in the short run and improve it in the long run. The authors also find that the asymmetrical effect of real exchange rate on trade balance is different in sign and magnitude. Finally, the results indicate that an increase in trade partners' income increases the trade balance in Algeria. The findings are of utmost importance with several policy implications.

While some works investigated the nonlinear response of trade balance to real exchange rate movements, their results remain inconclusive and seem to depend on the characteristics of the country/region of study. Moreover, the role of trade partners and their potential impact on trade balance has been relatively overlooked in the literature. The authors fill this gap by examining the asymmetric impacts of real exchange rate and the effect of trade partners' income on trade balance in Algeria.