Do Exchange Rate Changes Improve the Trade Balance in GCC Countries: Evidence from Nonlinear Panel Cointegration
This study examines the asymmetric impact of the nominal effective exchange rate (NEER) on the trade balance in GCC countries over the period of 2000:Q1 to 2017:Q4. The empirical findings of the nonlinear pooled mean group (PMG) estimator reveal the presence of a J-curve shape where an increase in NEER (currency depreciation) deteriorates the trade balance in the short run and improves it in the long run. Findings also prove that the trade balance’s response to NEER positive changes is greater compared to negative changes. The policy implication of these findings reveals that NEER is a useful tool to sustain the trade balance.
Other Information
Published in: The International Trade Journal
License: http://creativecommons.org/licenses/by-nc-nd/4.0/
See article on publisher's website: https://dx.doi.org/10.1080/08853908.2022.2121341
Funding
Open Access funding provided by the Qatar National Library.
Qatar National Research Fund (NPRP12S-0311-190314), The implementation of Qatarization strategy: The status quo, challenges and remedies.
History
Language
- English
Publisher
RoutledgePublication Year
- 2022
License statement
This Item is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.Institution affiliated with
- Qatar University
- College of Business and Economics - QU