Purpose – To avoid aggregation bias by using trade data at bilateral level so that we can determine how sensitive are Britain’s inpayments and outpayments to the value of the British pound.Design/methodology/approach – The method is based on the bounds testing approach to cointegration and...

The traditional way of assessing the impact of currency depreciation on the trade balance has been to estimate the elasticity of trade volume to relative prices. To this end, most previous studies used aggregate trade data. To shy away from problems associated with using aggregate data, recent...

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...

The traditional way of assessing the impact of currency depreciation on the trade balance has been to estimate the elasticity of trade volume to relative prices. To this end, most previous studies used aggregate trade data. To avoid aggregation biases potentially hidden in aggregate data, recent...

Currency depreciation is said to have positive or negative effects on domestic production. Previous studies that tried to address this issue using Australian data have been inconclusive at best but mostly showed no effects. One common feature of all studies is that they have assumed that the...