NONLINEAR AUTOREGRESSIVE DISTRIBUTED LAG APPROACH AND BILATERAL J‐CURVE: INDIA VERSUS HER TRADING PARTNERS |
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| Authors: | Mohsen Bahmani‐Oskooee Sujata Saha |
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| Affiliation: | 1. 414‐229‐4812414‐229‐4282;2. Patricia and Harvey Wilmeth Professor and UWM Distinguished Professor, The Center for Research on International Economics and Department of Economics, The University of Wisconsin‐Milwaukee, Milwaukee, WI 53201 |
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| Abstract: | The J‐curve studies related to India have mostly either used aggregate trade flows of India with the rest of the world or between India and its trading partners. They have all assumed exchange rate changes have symmetric effects on Indian trade balance. In this article, we use partial sum concept combined with the nonlinear autoregressive distributed lag approach of Shin et al. to show that indeed in some instances, there are evidences of asymmetry effects of currency depreciation. This new nonlinear approach provides more support for the J‐curve than the previous linear approaches. (JEL F31) |
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