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Title: |
The Australian J-Curve: A Reexamination |
| Author: |
Bahmani-Oskooee,
Mohsen; Pourheydarian, Mohammad |
| Author
Affiliation: |
U WI,
Milwaukee; Lindsey Wilson College |
| Source: |
International Economic Journal, Autumn 1991, v. 5, no. 3, pp. 49-58 |
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Publication Date: |
Autumn 1991 |
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Abstract: |
Previous studies that have investigated
the response of the Australian trade balance to a change in its exchange
rate have concluded that depreciation of the Australian dollar has
neither a short-run nor a long-run effect on the Australian trade
balance. In this paper using quarterly data over the 1977I-1988I period,
we show that in the short-run, the Australian trade balance follows a
pattern of movement described by the "Delayed J-Curve." As for its
long-run response, we provide statistically significant results,
indicating that in the long-run devaluation improves the Australian
trade balance. |
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