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Goswami, G. G., Economidou, C., and Bahmani-Oskooee., M. (2006). Bilateral J-curve b4eetween the UK vis-à-vis her major trading partners. Applied Economics, 38, 879-888.

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Article

Time Series Investigation of J-Curve of Pakistan with Saudi Arabia

1Department of Economics, University of Sargodha, Punjab- Pakistan

2Department of Economics, Government College University Faisalabad, Punjab-Pakistan


Journal of Finance and Economics. 2014, Vol. 2 No. 6, 210-214
DOI: 10.12691/jfe-2-6-2
Copyright © 2014 Science and Education Publishing

Cite this paper:
Sana Suleman, Dr. Ahmad Raza Cheema, Muhammad Faraz Riaz, Mahr Muhammd Yousaf, Anam Shehzadi. Time Series Investigation of J-Curve of Pakistan with Saudi Arabia. Journal of Finance and Economics. 2014; 2(6):210-214. doi: 10.12691/jfe-2-6-2.

Correspondence to: Muhammad  Faraz Riaz, Department of Economics, Government College University Faisalabad, Punjab-Pakistan. Email: fraz.riaz@gmail.com

Abstract

This study is focused in analyzing the existence of J-curve phenomenon of Pakistan with Saudi Arabia by using the time series data from 1973 to 2010. Order of integration of the variables is mix as some variables are I(0) and some are I(1). So, ARDL approach to cointegration is applied to find out the relationship between exchange rate and trade balance. Results in both models do not support the existence of J-curve. The conclusion which is drawn from these models is that depreciation is not useful tool in improving trade balance of Pakistan with Saudi Arabia. Pakistan has to fine some alternative way of improving trade balance with these countries.

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