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The J Curve Exposure Analysis of the Effective Exchange Rates

 

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  • Product Description
 
This study aims to find the relationship between real effective exchange rate and trade balance in Sri Lanka in order to find out the J curve phenomenon by using its 10 major trading partners. This paper first constructed the Nominal Effective Exchange Rate (NEER)and Real Effective Exchange Rate (REER)for Sri Lanka and then applied the Engle-Granger technique to investigate the long run cointegration relation between Balance of Trade (BOT) and REER, and finally employed the Error Correction Mechanism to explore the short-run linkage. Estimate results demonstrated that the REER has not a significant influence on Sri Lankan Trade Balance. The Granger Causality test suggests that the REER does not Granger cause the trade balance. We found that the Marshal-Lerner condition does not exist in Sri Lanka. Therefore, no evidence found to support the J curve theory in Sri Lanka. This implies that exchange rate policy is not an efficient policy tool in Sri Lanka. In order to improve the trade balance, Sri Lanka has to follow some other methods. Import tax policies can be imposed to reduce imports on selective basis and export promotion to increase the government revenue.
Product Specifications
SKU :COC5563
AuthorAchinthya Koswatta and Selliah Sivarajasingham
BindingPaperback
Number of Pages84
Publishing Year04/07/15
ISBN9.78E+12
Edition1st
Book TypeEconomics
Country of ManufactureIndia
Product BrandLAP LAMBERT Academic Publishing
Product Packaging InfoBox
In The Box1 Piece (Paperback)
Product First Available On ClickOnCare.com2015-06-24 00:00:00