The Role of Exchange Rate on Balance of Trade: Empirical From Pakistan
European Journal of Social Sciences, Vol. 14, No. 1, p. 150, 2010
7 Pages Posted: 30 Sep 2010
Date Written: September 29, 2010
Objective of this study is to estimate the impact of real exchange rate depreciation on balance of trade in Pakistan. The study examines validity of the Marshall Lerner condition in Pakistan data (1970-2008) by using impulse response function which fulfills the J-curve idea. To evaluate long run association among the variables by employing Johansson Co-integration test. The end consequence of test shows that there is long run relationship among the variables at vector two.
Keywords: Exchange Rate Depreciation, Balance of Trade
JEL Classification: F31, F32
Suggested Citation: Suggested Citation