Journal ArticleDOI
Determinants of Malaysian Trade Balance: An ARDL Bound Testing Approach
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In this paper, the authors examined the short and long-run relationships between trade balance, real exchange rates, income and money supply in the case of Malaysia using the bound testing approach to cointegration and error correction models.Abstract:
This paper examines the short- and long-run relationships between trade balance, real exchange rates, income and money supply in the case of Malaysia. The inclusion of income and money variables in the study is purposely to examine the monetary and absorption approaches to the balance of payments beside the conventional approach of elasticity, using exchange rates. Using the bound testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework, we investigate whether a long-run equilibrium relationship exists between trade balance and the determinants. Additionally, we adopt an innovation accounting by simulating variance decompositions (VDC) and impulse response functions (IRF) for further inferences. Using this approach, we find evidence of a long-run relationship between trade balance and income and money supply variables but not between trade balance and real exchange rate. The findings also suggest that Marshall–Lerner condit...read more
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Impact of globalization, economic factors and energy consumption on CO2 emissions in Pakistan
TL;DR: The examined results of dynamic ARDL simulations indicate that energy consumption, urbanization, economic growth, financial development, economic globalization, social globalization and political globalization have positive effect on CO2 emissions in Pakistan while trade, innovation and foreign direct investment have negative effect onCO2 emissions.
Journal ArticleDOI
Do exchange rate changes improve the trade balance: An asymmetric nonlinear cointegration approach
TL;DR: In this paper, the authors examined the impact of real effective exchange rate on the trade balance of eight countries in the context of several nonlinear techniques, especially the nonlinear auto-regressive distributed lag model (NARDL).
Journal ArticleDOI
The J‐ and S‐curves: a survey of the recent literature
TL;DR: In this article, the authors reviewed the literature on the J and S curves and proposed a method to test the validity of the J• and S-curves empirically, and showed that currency depreciation worsens the trade balance before improving it.
Journal ArticleDOI
Empirical tests of the Marshall‐Lerner condition: a literature review
TL;DR: The authors survey the literature that has tested the M•L condition, examining in particular whether previous studies' results are statistically significant, and conduct their own estimation of 29 countries' trade elasticities, over the past few decades.
Journal ArticleDOI
Urbanization-globalization-CO2 emissions nexus revisited: empirical evidence from South Africa
Mohammad Salahuddin,Mohammad Salahuddin,Jeff Gow,Jeff Gow,Md. Idris Ali,Md. Rahat Hossain,Khaleda Shaheen Al-Azami,Delwar Akbar,Ayfer Gedikli +8 more
TL;DR: Variance decomposition results do not rule out these effects of urbanization and globalization on CO2 emissions for South Africa in future, but only long-run significant emissions effect of globalization was noted.
References
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Journal ArticleDOI
Statistical analysis of cointegration vectors
TL;DR: In this paper, the authors consider a nonstationary vector autoregressive process which is integrated of order 1, and generated by i.i.d. Gaussian errors, and derive the maximum likelihood estimator of the space of cointegration vectors and the likelihood ratio test of the hypothesis that it has a given number of dimensions.
Journal ArticleDOI
Bounds testing approaches to the analysis of level relationships
TL;DR: In this paper, the authors developed a new approach to the problem of testing the existence of a level relationship between a dependent variable and a set of regressors, when it is not known with certainty whether the underlying regressors are trend- or first-difference stationary.
Journal ArticleDOI
Maximum likelihood estimation and inference on cointegration — with applications to the demand for money
Søren Johansen,Katarina Juselius +1 more
TL;DR: In this paper, the estimation and testing of long-run relations in economic modeling are addressed, starting with a vector autoregressive (VAR) model, the hypothesis of cointegration is formulated as a hypothesis of reduced rank of the long run impact matrix.
Journal ArticleDOI
Macroeconomics and reality
TL;DR: In this article, the authors argue that the style in which their builders construct claims for a connection between these models and reality is inappropriate, to the point at which claims for identification in these models cannot be taken seriously.
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