New Zealand’s trade balance : evidence of the J-curve and granger causality
Narayan, Paresh Kumar 2004, New Zealand’s trade balance : evidence of the J-curve and granger causality, Applied economic letters, vol. 11, no. 6, pp. 351-354.
Attached Files
(Some files may be inaccessible until you login with your Deakin Research Online credentials)
Name
Description
MIMEType
Size
Downloads
Title
New Zealand’s trade balance : evidence of the J-curve and granger causality
This article tests for the existence of any cointegration relationship between trade balance and real effective exchange rate (REER), foreign income and domestic income for New Zealand during the period 1970-2000. It also examines the direction of the casual relationship between the above variables, and applies the impulse response analysis to determine whether shocks to the REER induce the trade balance to follow a J-curve pattern. The results indicate that there is no cointegration relationship between the above variables; there is a casual connection in both directions between trade balance and foreign income; and New Zealand's trade balance exhibits a J-curve pattern when there is a depreciation of the New Zealand dollar.
Language
eng
Field of Research
140210 International Economics and International Finance