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Journal of Finance and Economics. 2014, 2(6), 210-214
DOI: 10.12691/jfe-2-6-2
Open AccessArticle

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

Sana Suleman1, Dr. Ahmad Raza Cheema1, Muhammad Faraz Riaz2, , Mahr Muhammd Yousaf1 and Anam Shehzadi2

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

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

Pub. Date: December 05, 2014
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Cite this paper:
Sana Suleman, Dr. Ahmad Raza Cheema, Muhammad Faraz Riaz, Mahr Muhammd Yousaf and 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

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.

Keywords:
Pakistan Saudia J-curve ARDL trade Cointegarion

Creative CommonsThis work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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