An empirical study of the foreign trade balance in China

Authors
Citation
Wx. Wei, An empirical study of the foreign trade balance in China, APPL ECON L, 6(8), 1999, pp. 485-490
Citations number
16
Categorie Soggetti
Economics
Journal title
APPLIED ECONOMICS LETTERS
ISSN journal
13504851 → ACNP
Volume
6
Issue
8
Year of publication
1999
Pages
485 - 490
Database
ISI
SICI code
1350-4851(199908)6:8<485:AESOTF>2.0.ZU;2-E
Abstract
The objective of this letter is to investigate the dynamic relationship bet ween China's trade balance (T) and macroeconomic variables: domestic and fo reign output (Y and Y*), real exchange rate (E), domestic and foreign money supply (M and M*). The ADF unit root results show that the variables are a ll integrated of order I(1). The trade balance in China is not cointegrated with a number of variables, including the exchange rate. Absorption, elast icity, and monetary models are compared, and the elastic model performs bet ter. There has been J-curve in China, and the devaluations have had signifi cant effect on the trade balance.