S‐curve Dynamics of Trade in Africa* |
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| Authors: | Mohsen Bahmani‐Oskooee Abera Gelan Artatrana Ratha |
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| Affiliation: | 1. Mohsen Bahmani‐Oskooee, The Center for Research on International Economics and Department of Economics, The University of Wisconsin‐Milwaukee, Milwaukee, WI 53201, USA;2. e‐mail: bahmani@uwm.edu. Abera Gelan, Department of Africology, The University of Wisconsin‐Milwaukee, Milwaukee, WI 53201, USA;3. e‐mail: agelan@uwm.edu. Artatrana Ratha, Economics Department, St Cloud State University, St Cloud, MN 56301, USA;4. e‐mail: aratha@stcloudstate.edu |
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| Abstract: | Abstract: Two concepts summarize the short‐run relationship between the trade balance and the terms of trade or the real exchange rate, the old concept known as the J‐curve and a new concept that comes under the heading of the S‐curve. The S‐curve introduced in 1994 basically claims that while the cross‐correlation between past value of the trade balance and current value of the exchange rate is negative, the correlation is positive between the future value of trade balance and the current value of the exchange rate. In this paper we investigated the experiences of 20 African nations and found support for the S‐curve in eight of them. |
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