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To avoid aggregation bias by using trade data at bilateral level so that we can determine how sensitive are Britain's inpayments and outpayments to the value of the British pound.

The method is based on the bounds testing approach to cointegration and error‐correction modeling.

The main finding is that while UK inpayments are not sensitive to the exchange rate, her outpayments are.

Future research must concentrate on disaggregating data further, perhaps at commodity level.

The results could be used to identify Britain's trading partners against which Britain can devalue the pound and improve her trade balance.

No study has attempted to test the impact of real depreciation of the pound on Britain's payments and receipts with her major trading partners.

The purpose of this paper is to investigate the sensitivity of Indonesia's inpayments and outpayments to currency depreciation on a bilateral basis.

The methodology used is based on the bounds testing approach.

It is found that while real depreciation of Rupiah has short‐run effects in a majority of the cases, these effects last into the long‐term in almost 50 percent of the cases. Surprisingly, almost all of the affected partners in the long run are found to be the Asian countries.

The paper is very original in that no one has looked at this issue before.

Against the background of international telecommunications liberalization and declining settlement payments for many developing countries, charging arrangements for Internet interconnection services have become a controversial issue. This article presents the essence of the complaints and counter‐arguments regarding whether current charging arrangements for Internet interconnection are inequitable and subject to anti‐competitive behaviour on the part of Internet backbone providers. A second paper, to be published in the next issue of info, reviews proposals for action to date and makes a number of recommendations as to how to move the debate usefully forward, including a number of positive measures that developing countries can take.

Measuring intellectual capital is a growing area of interest in the knowledge management field. Metrics are being developed and applied by some organizations, but there needs to be more research throughout the international community to better define these measures. One limitation of the current measures is that they do not necessarily address the “knowledge level” and the types of value‐added knowledge that individuals obtain. This paper takes a look at the current measures, discusses some possible limitations, and suggests some additional measures that could be used in the intellectual capital area to complement existing measures.

The size and growth of the so‐called “black economy” has provided a great deal of discussion in recent years. Typically the discussion has been confined to editorials and articles in leading newspapers, but of late politicians, civil servants and even academics, on both sides of the Atlantic have commented on the rise of the black economy. Despite this volume of comment, very few serious attempts have been made actually to measure the size of this unobserved sector for the UK.

Though an undervalued Yuan is not the only factor that contributes to the US bilateral trade deficit with China, it is widely accepted as being one of the leading factors. The heightened debate over the value of the Yuan may lead to “beggar thy neighbour” retaliation. The purpose of this paper is to provide a historical review of the Y/$ exchange rate movements, review the US congressional bills to revalue the Y/$ exchange rate and Chinese Government's reactions, presents a conceptual analysis of the effect of the undervalued Yuan on trade between China, the USA, and competitors, and discuss the arguments for and against revaluation of the Yuan.

Conceptual analysis graphically illustrates how the undervalued Yuan affects world trade and shows the benefits and losses for various countries.

Though an undervalued Yuan is not the only factor that contributes to the US bilateral trade deficit with China, it is widely accepted as being one of the leading factors. Due to its effects on production, consumption, and trade, a solution is needed. Although measuring the exact misalignment of the Chinese currency has led to various results, it is generally agreed that the Yuan is undervalued, and the US Congress has been persistent in introducing various bills to tackle the problems arising from the undervalued Yuan. Arguments for and against revaluation has heightened debate which may lead to “beggar thy neighbour” retaliation.

This paper outlines very timely and pretentious trade issues between China and the USA and contributes to the area of research of exchange rate effects on international trade.

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.

The objective of this study is to examine the relationship between defense expenditure and economic growth for Turkey and Greece in the period of 1956‐2003 using yearly data.

The Engle‐Granger cointegration methodology and Granger causality test are used.

It is found that these two variables are cointegrated for both countries studied. Unidirectional causality running from economic growth to defense expenditure is only found for Turkey.

The paper ınvestigates the long‐run relationship between defense expenditure and economic growth by conducting cointegration and causality tests in the context of Turkey and Greece over the period 1956‐2003.

Recent years have seen a rapid expansion of studies that examine the effects of exchange-rate risk on bilateral exports and imports for specific industries. Since the underlying theory is ambiguous, each case must be studied individually. This paper considers British trade with China, for 47 types of product, over the period from 1978 to 2010. Consistent with the underlying theory, cointegration analysis shows that most industries register no effect due to volatility in the long run, while some trade flows are reduced and a handful are even increased. An analysis of industry characteristics suggests that while the type of good might play little role on an industry's specific results, a product's trade share does. This is the case for UK imports of Chinese goods, perhaps because large Chinese exporters are able to successfully hedge against exchange-rate risk. The paper aims to discuss these issues.

The method is based on bounds testing approach to cointegration and error-correction modeling.

The paper arrives at two key conclusions. First, as has been shown previously for other country pairs, most industries demonstrate no long-run response to exchange-rate volatility. A fraction of industries are affected, and most of these effects are negative.

This research pertains to the case of industry trade between the UK and China only.

The paper identifies industries that are affected by exchange rate uncertainty.

No study has looked at the impact of exchange rate uncertainty on the trade flows between China and the UK at commodity level.