The J-curve : evidence from Fiji

Narayan, Paresh Kumar and Narayan, Seema 2004, The J-curve : evidence from Fiji, International review of applied economics, vol. 18, no. 3, pp. 369-380.

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Title The J-curve : evidence from Fiji
Author(s) Narayan, Paresh Kumar
Narayan, Seema
Journal name International review of applied economics
Volume number 18
Issue number 3
Start page 369
End page 380
Publisher Routledge
Place of publication London, England
Publication date 2004-07
ISSN 0269-2171
1465-3486
Summary This article provides new evidence on both long run and short-run determinants of trade balance for Fiji and investigates evidence of J-curve adjustment behaviour in the aftermath of a devaluation. We adopt a partial reduced form model that models the real trade balance directly as a function of the real exchange rate and real domestic and foreign incomes. Cointegration analysis is based on a recently developed autoregressive distributed lag approach—shown to provide robust results in finite samples. The long run elasticities are also estimated using a dynamic ordinary least squares approach and the Fully Modified Ordinary Least Squares (FM-OLS) approach. Amongst our key results we find that there is a long-run relationship between trade balance and its determinants. There is evidence of the J-curve pattern; growth in domestic income affects Fiji's trade balance adversely while foreign income improves it.
Language eng
Field of Research 140212 Macroeconomics (incl Monetary and Fiscal Theory)
HERDC Research category C1.1 Refereed article in a scholarly journal
Persistent URL http://hdl.handle.net/10536/DRO/DU:30024688

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