Investigating the Relationship between Trade Balance and the Exchange Rate: The Case of Laos’ Trade with Thailand
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BANIK, ARINDAM GLOBAL BUSINESS REVIEWSummary: 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.
| Item type | Current library | Call number | Vol info | Status | Notes | Date due | Barcode | Item holds | |
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Journal Article
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Main Library | /Vol 19, No 3/ 5558944JA5 (Browse shelf(Opens below)) | Available | 5558944JA5 | |||||
Journals and Periodicals
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Main Library On Display | JP/GEN/Vol 19, No 3/5558944 (Browse shelf(Opens below)) | Vol 19, No 3 (10/05/2018) | Not for loan | June, 2018 | 5558944 |
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.
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