Balance of Trade

In the era of globalization, global macroeconomic crises and the changes in the international trade pattern have accentuated the need for clearer understanding of the factors underlying a country's balance of trade position. In this onset, this paper examines the short run and long run effect of real effective exchange rate on trade balance of Ethiopia together with other variables that assumed to have effect on trade balance such as real GDP, government consumption, money supply and trade openness. The Autoregressive Distributed Lag (ARDL) Approach is used for analysis time serious annual data of period 1979/80 to 2013/34. Different diagnostic tests are under taken to check this time series data consistency and stability of selected model. As econometrics result reveals that these macro economic variables have short run as well as long run positive and significant effect on trade balance of the country except money supply, which has negative effect in the short run. That is in ...

This study aims to investigate that whether or not exchange rate depreciation has impact on trade balance of Pakistan when it is trading with developing eight countries (D-8). J-curve theory of trade postulates that initially, on depreciation of a country's currency, it deteriorates the trade balance, however, in long run when adjustments are taken place the trade balances improves. Actually, the depreciation makes the foreign goods (imports) expensive for the home country and domestic goods (exports) cheaper for the rest of the world. Consequently, it improves the balance of trade, hence the balance of payment of a country. This study uses the quarterly data from 2005QI to 2014QIV to assess the effects of exchange rate on balance of trade of Pakistan to investigate the J-curve phenomenon in the case of Pakistan with D-8 group. A relatively new empirical estimation technique of ARDL has been applied along with Granger Causality test. Hence, the empirical results of this study found a long run positive significant impact of exchange rate depreciation on trade balance along with a short run negative significant effect. Therefore, these finding support the existence of J-curve in the case of Pakistan with D-8. It is concluded that depreciation policy may be used as a policy tool to correct the deficit in balance of trade of Pakistan especially when trading with developing economies.

Pharmaceutical industry contributes to the welfare of humanity and provides significant socioeconomic benefits to the society through creation of jobs, supply chains and community development. Indian Pharmaceutical industry is one of the world's largest and most developed, ranking fourth in terms of volume and thirteenth in terms of value. The country accounts for an estimated 10% of global production and 2% of world markets in pharmaceuticals. It has over the years made significant progress in infrastructure development, technical capability and hence produced a wide range of pharmaceutical products. The industry now produces bulk drugs under all major therapeutic groups. It has a sizable technically skilled manpower with prowess in process development and downstream processing. It has the capital investment of about US$4.1billion. It produced bulk drugs of value of US$3.5 billion and formulations worth US$15.4billion in 2008. Bulk drugs have grown at a rate of approximately 14%, and formulation by 24% in the nineties. There is an increasing interest and investment in R&D. It provides employments 29 million people. The contribution of pharmaceutical sector in India's GDP is 2% and 12% of manufacturing sector GDP.

Remittances constitute a substantial part of a country’s
financial inflows. The size of remittances in some cases has surpassed the amount of foreign direct investment and other financial inflows. Considering the large size of remittances, it can have an influence over macroeconomic variables especially on GDP and balance of payments.
This study analyzes the relationship among remittances, balance of trade, inflation and GDP. The study used an annual dataset from 1978 to 2009. Stationarity of the variables has been checked by using ADF. The co-integration among variables has been analyzed by using the Engle Granger two step procedure and the Johnson’s co-integration method. A long run relationship has been found among workers’ remittances, GDP, inflation, and trade balances.

This paper aims to empirically examine the drivers of the bilateral balance of the trade model for the Georgian-Chinese economy from 2000 to 2020 and the influence of the Georgia-China free trade agreement on the Georgian-Chinese balance of trade. The Error Correction Model (ECM) of the ARDL was used to see if the balance of trade and its predictors have a long-term relationship. One of the ARDL's defining properties is that it may be utilized in circumstances when there is minimal data, regardless of the level of variable integration. According to the findings, a perceived effective exchange rate has a statistically significant positive impact on the balance of trade in the long run and a statistically significant negative impact on the balance of trade in the short run. The output is shaped to favor the presence of the elasticity attitude's J-Curve impact. The study also found that the comparative supply of money (MS) and GDP have only a minor impact on the trade balance in the medium and long run. The sponging and monetary methods are ineffective in characterizing the bilateral trade deficit between Georgia and China.

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

. In this paper we analyze one aspect of the possible impacts of the FTA: that on India's Balance of Trade. It is found that the impact of the agreement on India's balance of trade is expected to be negative. India's imports will rise significantly, however there will be no commensurate rise in India's export to these countries except to Indonesia.

This study explores the affect of India's exchange rate with US on Indian trade balance over the period of 1965-2008. We use ARDL bounds testing approach to cointegration and for dynamic analysis IRFs and VDs. For dynamic analysis impulse response functions and variance decompositions are used. We find cointegrating relationship among the tested variable, positive impact of depreciation in Indian rupee against US dollar and trade policies in previous period on Indian trade balance while an negative impact of money supply and economic growth on trade balance in short span of time. Moreover, J-curve is validated in case of India with US.

Various presidential candidates over the years have promised to reduce the U.S. trade deficit. Such arguments are based on the mistaken belief that trade deficits are bad. This paper explains why the United States is doomed to have trade deficits, and why it doesn't matter. The paper also includes a bibliography of more than 100 articles about trade, with links that will take the reader to the article.

There is an almost complete series of 132 analytical balances of trade of the different customs of Venice from 1769 to 1800. The series is known since an essay in 1936, which contains however some interpretative mistakes that have been repeated since, without criticism. This paper proposes a new understanding of this source on the basis of an unachieved research project of the 1990s, which aimed at transcribing the integrality of this source in a data-base and to put it at the disposal of the public. The source is replaced here in a broader context since the 1680s. After a brief description of the customs system of the last century of existence of the Republic of Venice, and a presentation of this source, of its limits and potentialities, providing some examples, the paper analyses some of the problems created by the a-critical use of some informations of this series, such as the price of the items (a virtual value, thus an account fiction), the places stated as origin or destination of the goods (corresponding sometimes to the closest stage), the “German” market, the goods in transit, which can produce a false image of the trade movement of Venice if they are not interpreted and corrected through complementary information drawn from other Venetian sources and a comparative check with other exterior sources.

Il existe une série presque complète de 132 bilans commerciaux analytiques des différentes douanes de Venise pour les années 1769-1800. Elle est connue depuis un essai de 1936, qui contient toutefois des erreurs d’interprétation repris sans critique par la suite. Cet article en propose une relecture à partir de l’expérience acquise au cours d’un projet mis en chantier dans les années 1990, mais resté inachevé, qui visait à transcrire l’intégralité de cette source dans une base de données d’accès public. Cette documentation est replacée ici dans un contexte plus large, à partir des années 1680. Après une description sommaire du système douanier du dernier siècle d’existence de la République de Venise et de cette source, présentée avec ses limites et ses potentialités, et illustrée à partir de quelques exemples, l’article analyse quelques problèmes créés par un usage acritique de certains types d’informations, comme le prix des marchandises (une valeur virtuelle, fiction comptable), la question des places indiquées comme départ ou comme destination (qui correspondent parfois à l’escale la plus proche), le marché « allemand », les marchandises en transit, qui peuvent engendrer une représentation déformée du mouvement commercial de Venise si elles ne sont pas interprétées et corrigées à la lumière d’autres sources vénitiennes et par une vérification comparative avec d’autres sources extérieures.

The diagnostic trade integration study (DTIS) update identifies the trade related constraints holding back Malawi from diversifying and deepening its production base, and increasing trade. The DTIS update identifies and quantifies specific trade costs that determine the availability and price of inputs and the ability of producers to get their products to regional and international markets. The report focuses on tariff policies, regulatory issues impacting on trade, trade facilitation and logistics, and policies affecting agricultural trade and trade in services. Recognizing that the (enhanced) integrated framework and the DTIS (including the 2003 DTIS for Malawi) have not been effective in addressing many of the broader issues requiring large-scale physical investments in most countries, this DTIS update focuses on specific trade related policy and regulatory issues within the mandate and policy space of the ministry of trade and the national implementation unit or similar implemen...

Ghana's economic program after independence emphasized public investment and spending as the road to growth, a strategy that led to recurring fiscal deficits and declining growth. Since the 1984 Economic Recovery Program, Ghana's fiscal deficits have declined and the ...

The model proposed in this article allows analyzing and forecasting the dynamics of Russian foreign economic activity on the base of the balance of payments. The model includes several econometric equations of all the main components of the payments balance, which represent the actual values with a high level of accuracy. Despite some problems related to the transformation of raw statistical data
due to a variety of changes in reporting standards, that were described in the paper, the constructed model can predict monthly dynamics of the main components of the Russian payments balance in the short term from 12 to 18 months. To demonstrate the model’s performance, the authors employed three different scenarios driven by various combinations of exogenous variables, such as the prices of resources, the growth rates of the Russian main trading partners as well as the country’s current economic policy in basic, optimistic and pessimistic states.

The role of exchange rate movements in determining the trading position of a country and the ultimate welfare of its people vis-a-vis its trading partners is enormous. Consequently, this study is conducted to examine the nature of the trading relationship between Nigeria and its trading partners in three continents-North America, Europe and Asia. The study specifically focuses on how the fluctuation of naira vis-a-vis the pound sterling, dollar and Yuan affects Nigeria's trading position in relation to UK, US and Hong Kong (China). Quarterly data that span the period from 1981 to 2015 were used and linear and Non-linear ARDL estimation techniques were deployed to prove the existence of linear and nonlinear J-Curve. The findings, based on linear ARDL, show no proof of J-Curve in all the models, however, cointegration exists between the trade balance and the exchange rate dynamics. In non-linear ARDL, the existence of J-Curve is only observed in Nigeria-Hong Kong model. However, t...

The quickest accession to the European Union is a shared, short term goal of the Western Balkan countries (Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia and Montenegro, while Croatia has already accessed). It will cause remarkable changes on their agricultural sector and therefore on their agricultural trade. In order to evaluate the possible effects of the accession, the present situation of agriculture should be analysed. This paper gives an overview of the Western Balkan countries’ agriculture (agricultural value added, agricultural employment, agricultural production and its structure) and its trade relations (major trade partners, major products, trade balance,) and discusses the potential impact that adoption of EU domestic agricultural and trade policy would have on the sector. The experience of other new member states from Central and Eastern Europe shows that price, production and trade can change significantly after accession as well as during ...

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

After several decades of decline, the US machine tool (MT) industry entered a modest period of recovery in the mid-1990s. With the slowdown of the global economy in the early 2000s, however, this recovery has stalled. By now, there are clear signs that rates of firm exit are increasing. This paper compares the results of a survey of MT producers (conducted in 2000) with more recent industry data (2004). Four years after the optimistic findings of the 2000 survey were reported, we find that many of the small-to-medium sized producers have either ceased operations or have downscaled substantially. While virtually every US manufacturer of MT products has been negatively affected by the global economic downswing, adverse business conditions have had a disproportionately severe impact upon firms that cater primarily to local markets. MT manufacturers located within the nation's traditional industrial heartland have been the hardest hit, notably as a result of rising import competition. In contrast to locally-oriented producers, our findings suggest that a small number of innovative MT companies have been faring quite well as a result of continued export development. The paper concludes with a brief discussion of several futures for the domestic MT sector.

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

This paper addresses three questions about the prospects for the U.S. current account deficit. Is it sustainable in the long term? If not, how long will it take for measures of external debt and debt service to reach levels that could prompt some pullback by global investors? And if and when such levels are breached, how readily would asset prices respond and the current account start to narrow?

We investigate the nexus between Laos’ trade balance and its real exchange rate with Thailand. We apply the combined cointegration approach and find that the trade balance and the real exchange rate have cointegration. The devaluation of Laos’ Kip improves the trade balance, but there is no evidence of the J-curve phenomenon. Laos’s economic growth causes its trade balance to deteriorate. A rise in Thai income increases the trade balance of Laos. This study presents new insights for policymakers who seek to sustain trade with Thailand by designing a comprehensive trade policy.

This volume is a product of the staff of the International Bank for Reconstruction and Development/ The World Bank. The findings, interpretations, and conclusions expressed in this paper do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries.

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

Todos los Derechos Reservados Esta publicación es un producto del personal del Banco Internacional de Reconstrucción y Fomento / Banco Mundial. Los hallazgos, interpretaciones y conclusiones expresados en este volumen no reflejan necesariamente las opiniones de los Directores Ejecutivos del Banco Mundial o de los gobiernos que representan. El Banco Mundial no garantiza la exactitud de los datos incluidos en este trabajo. Las fronteras, colores, denominaciones y demás datos que aparecen en cualquier mapa de este trabajo no implican ningún juicio por parte del Banco Mundial en relación a la condición jurídica de cualquier territorio ni la aprobación o aceptación de tales límites. Derechos y Permisos El material de esta publicación está protegido por Derechos de Autor. La reproducción y / o transmisión total o parcial de esta obra sin permiso puede ser una violación de la legislación aplicable. El Banco Internacional de Reconstrucción y Fomento / Banco Mundial alienta la difusión de su trabajo y normalmente concederá permiso para la reproducir de partes del trabajo con prontitud.

Este trabalho se propõe a apontar a questão do saldo comercial como uma das principais barreiras ao crescimento econômico brasileiro Dentro deste escopo, ao contrário da investigação dos problemas relacionados à taxa de câmbio, optou-se por verificar o papel desempenhado pela capacidade instalada da indústria de transformação na determinação dos saldos comerciais, seguindo, com isso, as linhas gerais da política comércio exterior pós-Plano Real. Dessa forma, inicialmente, se traça um perfil da relação entre as duas variáveis, com uma breve revisão da abordagem de outros autores sobre o tema, posteriormente é feita uma identificação dos deslocamentos da série histórica que representa a relação, encerrando-se com uma análise dos períodos identificados e com as conclusões obtidas com o trabalho.

We argue that there is a strong link between a successful international monetary system and net flows of savings from periphery (poor) countries to center (rich) countries. It is enlightening to compare the implicit economic contract between the center and the periphery to a standard total return equity swap. In such contracts, the less creditworthy party to the contract is required to post collateral for actual and potential mark to market losses.

In the era of globalization, global macroeconomic crises and the changes in the international trade pattern have accentuated the need for clearer understanding of the factors underlying a country's balance of trade position. In this onset, this paper examines the short run and long run effect of real effective exchange rate on trade balance of Ethiopia together with other variables that assumed to have effect on trade balance such as real GDP, government consumption, money supply and trade openness. The Autoregressive Distributed Lag (ARDL) Approach is used for analysis time serious annual data of period 1979/80 to 2013/34. Different diagnostic tests are under taken to check this time series data consistency and stability of selected model. As econometrics result reveals that these macro economic variables have short run as well as long run positive and significant effect on trade balance of the country except money supply, which has negative effect in the short run. That is in ...

This study uses quarterly data from 1980.1 to 2006.4 to explore the relationship between changes in real exchange rate and the trade balance indicators of Pakistan. Applying Auto Regressive Distributed Lag (ARDL) approach to cointegration we examine the existence of a possible long run relationship. We find the following: (a) a long run relationship between the series exists; and b) the coefficient of elasticity is negative and statistically significant which does not support for the J-relation. Given this, the policymakers should take conservative approach in using currency devaluation to cure the fundamental disequilibrium in the balance of payments. It is likely that such policy may not produce the desired outcome-i.e., the trade balance may not improve.

Este trabalho tem como objetivo principal o estudo do comportamento da taxa de câmbio a partir da flutuação da moeda brasileira em 1999 – momento em que o Brasil adotou o regime de câmbio flutuante. Analisa-se, através do modelo de paridade de poder de compra, se efetivamente a moeda brasileira se apreciou ou depreciou nos nove anos considerados e em que dimensão isto ocorreu. Após a comparação entre a taxa de câmbio efetivamente praticada e a taxa cambial de paridade entre 1999 e 2007, verifica-se a influência exercida pela taxa de câmbio na balança comercial brasileira.

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

The team would like to convey its gratitude particularly to the Government of Papua Province for the support, advice and guidance provided during the preparation of this report. The team would like to thank especially Mr. Syafruddin Daerlan, Mr. Max Boekorsjom, Mr. Eddy WP Utomo, and all members of the program management committee (PMC) who coordinated and directed this study. On this occasion, the team would also like to convey its great appreciation for the support and direction from the National Development Planning Agency represented by Dr. Ir.

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The paper analyses the impact of FDI in Romania on macroeconomic aggregates of GDP, exports, imports, trade balance, current account and, balance of external payments, focusing on the relationship between main determinants of FDI efficiency for host and origine countries. A special attention is paid to the role of reinvested and expatriated profits of spillovers, transfer, prices and struct under the circumstances of current economic and financial crisis, in an international comparative context.