Exchange Rate Sensitivity of Japan’s Bilateral Trade Flows

Bahmani‐Oskooee, Mohsen; Goswami, Gour Gobinda

Exchange Rate Sensitivity of Japan’s Bilateral Trade Flows

Bahmani-Oskooee, M. & Goswami, G. G. (2004). "Exchange rate sensitivity of Japan’s bilateral trade flows", Japan and the World Economy, 16, 1-15.

Posted: 18 May 2020

See all articles by Mohsen Bahmani‐Oskooee

Mohsen Bahmani‐Oskooee

University of Wisconsin - Milwaukee - Center for Research on International Economics

Gour Gobinda Goswami

North South University

Date Written: 2004

Abstract

The traditional way of assessing the impact of currency depreciation on the trade balance has been to estimate the elasticity of trade volume to relative prices. To this end, most previous studies used aggregate trade data. To shy away from problems associated with using aggregate data, recent studies have relied on bilateral trade data. Since import and export price data is not available on bilateral level, this study proposes an alternative way of assessing the impact of currency depreciation on bilateral trade ﬂows. The models are applied between Japan and her nine largest trading partners using recent advances in time-series modeling.

Keywords: Inpayments; Outpayments; Currency depreciation; Cointegratio

JEL Classification: F31

Suggested Citation: Suggested Citation

Bahmani-Oskooee, Mohsen and Goswami, Gour Gobinda, Exchange Rate Sensitivity of Japan’s Bilateral Trade Flows (2004). Bahmani-Oskooee, M. & Goswami, G. G. (2004). "Exchange rate sensitivity of Japan’s bilateral trade flows", Japan and the World Economy, 16, 1-15., Available at SSRN: https://ssrn.com/abstract=3575438