Malaysia-Japan Commodity Trade and Asymmetric Effects of Exchange Rate Changes |
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| Authors: | Mohsen Bahmani-Oskooee Muhammad Aftab |
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| Affiliation: | 1. Center for Research on International Economics and Department of Economics, University of Wisconsin-Milwaukee, WI 53201, USA2. Department of Management Sciences, COMSATS University Islamabad, Islamabad 45550, Pakistan |
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| Abstract: | Asymmetry analysis is a new norm in applied research and the link between the trade balance and the exchange rate is no exception. In this paper we investigate the asymmetric response of the trade balance of each of the 60 industries that trade between Malaysia and Japan. We find short-run asymmetric effects of exchange rate changes on the trade balance of 50 industries (including the two largest industries), short-run adjustment asymmetry in 47 industries, and short-run impact asymmetry in 30 industries. However, short-run asymmetric effects lasted into the long run only in limited number of industries. Results are industry-specific at best. |
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| Keywords: | Auto Regressive Distributed Lag (ARDL) asymmetry 60 industries Malaysia Japan trade exchange rate |
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