Open AccessThe J-Curve Hypothesis And Currency Devaluation: Cases Of Egypt And Ghana
Author(s) -
Kishore G. Kulkarni
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v12i2.5821
Subject(s) - devaluation , economics , currency , exchange rate , econometrics , balance (ability) , keynesian economics , monetary economics , psychology , neuroscience
The paper reviews effects of devaluation on balance of trade by using Marshall Lerner condition, J-Curve hypothesis. It extends the hypothesis further to consider a case of continuous devaluations of exchange rates. After initially contributing to conventional theory of J-Curve hypothesis, and the paper then tests the theory for cases of Ghana and Egypt. In both cases it is found that theoretical arguments are consistent with empirical evidence. Paper consists of four sections including introduction.