Welcome to Open Science
Contact Us
Home Books Journals Submission Open Science Join Us News
Exchange Rate and Determinants of Balance of Trade, Its Impact on Balance of Payment
Current Issue
Volume 3, 2015
Issue 1 (February)
Pages: 14-18   |   Vol. 3, No. 1, February 2015   |   Follow on         
Paper in PDF Downloads: 92   Since Aug. 28, 2015 Views: 1256   Since Aug. 28, 2015
Authors
[1]
Amna Nazeer, Schools of Statistics and Mathematics, HuaZhong University of Science and Technology, Wuhan, China.
[2]
Khuram Shafi, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
[3]
Zahra Idrees, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
[4]
Liu Hua, School of Management, HuaZhong University of Science and Technology, Wuhan, China.
Abstract
An endogenous search for the relationship between exchange rate and determinants of balance of trade and its impact on balance of payment is made. Exchange rate is affected by certain factors like balance of trade and balance of payment. Balance of trade is measured using different factors like exports, imports, capital goods, consumption level, oil prices and political uncertainty. This study is not yet been conducted in Pakistan and we have done this research to evaluate the impact of different factors on exchange rate. Exchange rates help a country while making imports and exports and balance of trade tells about the imports and exports of that country during any particular time period. The paper looks at how the exchange rate is affected by the balance of trade of a country and also explores the relationship between exchange rate and balance of payments. Balance of payment is taken as dependent variable in this paper. Both balance of trade and balance of payment affects the exchange rate and similarly manufacturing growth rate is also affected through variation in exchange rate. The results have shown that there is significant relationship between exchange rate and balance of trade and balance of payment. Both balance of trade and balance of payment have strong relationship with exchange rate.
Keywords
Exchange Rate, Balance of Trade, Balance of Payment
Reference
[1]
Makin, A. J. (2001). The Balance of Payments and the Exchange Rate.International Economics, Finance and Trade, Online available at: http://www. eolss. net/Sample-Chapters C, 13.
[2]
Kwack, S. Y., Ahn, C. Y., Lee, Y. S., & Yang, D. Y. (2007). Consistent estimates of world trade elasticities and an application to the effects of Chinese Yuan (RMB) appreciation. Journal of Asian Economics, 18(2), 314-330.
[3]
Nadenichek, J. (2000). The Japan–US trade imbalance: a real business cycle perspective. Japan and the World Economy, 12(3), 255-271.
[4]
Olekalns, N., & Wilkins, N. (1998). Re‐examining the Evidence for Long‐Run Purchasing Power Parity. Economic Record, 74(224), 54-61.
[5]
Frankel, J. A., & Rose, A. K. (1996). A panel project on purchasing power parity: mean reversion within and between countries. Journal of International Economics, 40(1), 209-224.
[6]
Ahtiala, P. (2009). When is money neutral under flexible exchange rates? International Review of Economics & Finance, 18(2), 318-326.
[7]
Domar, E. D. (1950). The effect of foreign investment on the balance of payments. The American Economic Review, 805-826.
[8]
Jensen, N. M. (2004). Crisis, Conditions, and Capital The Effect of International Monetary Fund Agreements on Foreign Direct Investment Inflows. Journal of Conflict Resolution, 48(2), 194-210.
[9]
Helliwell, J. F. (1978). The balance of payments: a survey of Harry Johnson's contributions. Canadian Journal of Economics, S55-S86.
[10]
Santos‐Paulino, A., & Thirlwall, A. P. (2004). The impact of trade liberalisation on exports, imports and the balance of payments of developing countries. The Economic Journal, 114(493), F50-F72.
[11]
Nawaz, A., Raheem, A. R., Khoso, I., Palwishah, R. I., & Raza, U. (2014). Impact of Exchange Rate on Balance of Payment: An Investigation from Pakistan. Research Journal of Finance and Accounting, 5(13), 2222-1697.
[12]
Ng, Y. L., Har, W. M., & Tan, G. M. (2009). Real exchange rate and Trade Balance relationship: An empirical study on Malaysia. International Journal of Business and Management, 3(8), P130.
[13]
Felipe, J., McCombie, J. S. L., & Naqvi, K. (2010). Is Pakistan's Growth Rate Balance-of-Payments Constrained? Policies and Implications for Development and Growth. Oxford Development Studies, 38(4), 477-496.
Open Science Scholarly Journals
Open Science is a peer-reviewed platform, the journals of which cover a wide range of academic disciplines and serve the world's research and scholarly communities. Upon acceptance, Open Science Journals will be immediately and permanently free for everyone to read and download.
CONTACT US
Office Address:
228 Park Ave., S#45956, New York, NY 10003
Phone: +(001)(347)535 0661
E-mail:
LET'S GET IN TOUCH
Name
E-mail
Subject
Message
SEND MASSAGE
Copyright © 2013-, Open Science Publishers - All Rights Reserved