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NONLINEAR AUTOREGRESSIVE DISTRIBUTED LAG APPROACH AND BILATERAL J‐CURVE: INDIA VERSUS HER TRADING PARTNERS
Author(s) -
BahmaniOskooee Mohsen,
Saha Sujata
Publication year - 2017
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/coep.12197
Subject(s) - distributed lag , autoregressive model , economics , econometrics , lag , nonlinear system , depreciation (economics) , balance of trade , currency , exchange rate , mathematics , monetary economics , macroeconomics , microeconomics , computer science , profit (economics) , computer network , physics , capital formation , quantum mechanics , financial capital
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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