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Examining the relationship between trade balance and exchange rate : the case of China's trade with the USA

Narayan, Paresh Kumar 2006, Examining the relationship between trade balance and exchange rate : the case of China's trade with the USA, Applied economics letters, vol. 13, no. 8, pp. 507-510.

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Title Examining the relationship between trade balance and exchange rate : the case of China's trade with the USA
Author(s) Narayan, Paresh Kumar
Journal name Applied economics letters
Volume number 13
Issue number 8
Start page 507
End page 510
Publisher Routledge
Place of publication London, England
Publication date 2006-06
ISSN 1350-4851
1466-4291
0003-6846
0960-3107
Keyword(s) economics
macroeconomics
Summary In this paper, we investigate the nexus between China's trade balance and the real exchange rate vis-à-vis the USA. Using the bounds testing approach to cointegration, we find evidence that China's trade balance and real exchange rate vis-à-vis the USA are cointegrated, and using the autoregressive distributed lag model we find that in both the short run and the long run a real devaluation of the Chinese RMB improves the trade balance; as a result, there is no evidence of a J-curve type adjustment.
Language eng
Field of Research 140210 International Economics and International Finance
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2006, Taylor & Francis
Persistent URL http://hdl.handle.net/10536/DRO/DU:30018595

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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