Does J-curve phenomenon exist in case of Laos An ARDL approach》.pdfVIP

Economic Modelling 35 (2013) 833–839 Contents lists available at ScienceDirect Economic Modelling j ournal homepage : www.el /l oc ate/ ecmod Does J-curve phenomenon exist in case of Laos? An ARDL approach Phouphet Kyophilavong a, Muhammad Shahbaz b, Gazi Salah Uddin c,1 a Faculty of Economics and Business Management, National University of Laos, PO Box 7322, NUoL, Vientiane, Laos b Department of Management Sciences, COMSATS Institute of Information Technology, Lahore, Pakistan c Department of Management and Engineering, Linköping University, SE-581 83 Linköping, Sweden a r t i c l e i n f o a b s t r a c t Article history: This study aims to test the existence of J-curve phenomenon in Laos economy using quarterly data over the pe- Accepted 12 August 2013 riod of 1993–2010. The ARDL bounds testing approach to cointegration is used to examine short run as well as long run impact of real depreciation of Lao kip on Lao trade balance. The empirical results suggest that there is JEL classifi cation: J-curve effect in case of Laos. The impact of real depreciation of the Lao kip on Lao trade balance is insigni ficant F31 in long run. In short-run, real depreciation has inverse impact on Laos trade balance. The long-run trade balance Keywords: is determined by domestic income. J-curve