Asymmetric Cointegration and the J-Curve: New Evidence From Commodity Trade Between the U.S. and Canada

Document Type

Article

Publication Date

5-1-2020

Department

Political Science, International Development, and International Affairs

School

Social Science and Global Studies

Abstract

© 2019, Springer-Verlag GmbH Germany, part of Springer Nature. Previous research that investigated asymmetric effects of exchange rate changes on the bilateral trade balance of the U.S. with Canada using their aggregate bilateral trade flows did not find support for such effects. In this paper we disaggregate the trade flows of the two countries by commodity and consider experiences of 161 industry that trade between them. After estimating the linear and nonlinear ARDL models we find support for the asymmetric short-run effects in all industries, short-run adjustment asymmetry in 69 industries, significant short-run cumulative or impact asymmetry in 37 industries and significant long-run asymmetric effects in 62 industries. Small as well as large industries were in the list.

Publication Title

International Economics and Economic Policy

Volume

17

Issue

2

First Page

427

Last Page

482

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