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2011•RePEc: Research Papers in EconomicsRequires access

Impact of Devaluation on Trade Balance in Pakistan

Muhammad Asif, Kashif Rashid

Open publisher page 5 citations

Abstract

The purpose of this paper is to find the impact of devaluation on trade balance in Pakistan in both long and short run using bound testing approach to Cointegration and Error Correction Mechanism (ECM). The result shows that devaluation is effective in improving trade balance and there is a cointegrated relationship between the real effective exchange rate and trade balance in the long run.

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What this paper is about

The purpose of this paper is to find the impact of devaluation on trade balance in Pakistan in both long and short run using bound testing approach to Cointegration and Error Correction Mechanism (ECM). The result shows that devaluation is effective in improving trade balance and there is a cointegrated relationship between the real effective exchange rate and trade balance in the long run.

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OpenAlex reports 5 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

The purpose of this paper is to find the impact of devaluation on trade balance in Pakistan in both long and short run using bound testing approach to Cointegration and Error Correction Mechanism (ECM). The result shows that devaluation is effective in improving trade balance and there is a cointegrated relationship between the real effective exchange rate and trade balance in the long run.

Key concepts: Devaluation, Cointegration, Balance of trade, Economics, Exchange rate, Balance (ability), Monetary economics, Error correction model

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