In a recent article, with a strong theoretical argument but poor empiricalsupport, military spending was identified to be a determinant of realexchange rate or a factor causing the PPP to deviate from equilibriumexchange rate. The poor empirical results were mostly due to a small numberof...

Several studies have tested the J-curve phenomenon for Australia using non-stationary aggregate trade data and have provided mixed results. They not only suffer from the 'aggregation bias problem' but also from the 'spurious regression problem'. To overcome these problems, in this paper we...

A limited number of studies have tested the J-Curve phenomenon using bilateral trade data between the United States and its major trading partners. In this paper, we test the J-Curve hypothesis by using quarterly bilateral data over the 1973-98 period between Japan and its nine major trading...

In theoretical literature, smuggling is considered as a factor contributing to the deviation of the PPP-based exchange rates from the equilibrium exchange rates with little empirical support. In this paper, we used panel data for 33 developing countries over the period 1982-1995 and used panel...

Numerous studies in the literature have tried to test whether export causes economic growth or economic growth causes export growth. The statistical approach has been one of applying Granger or Sims causality test to data drawn from individual country. In order to increase the power of existing...

There is a common belief that currency depreciation worsens the trade balance in the short run and improves it in the long run resulting in the so called J-curve phenomenon. Early studies employed aggregate data and provided mixed results. Recent studies, however, have employed disaggregated...