Impact of the Terms of Trade on the Trade Balance of Malaysia: An Empirical Examination
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Impact of the Terms of Trade on the Trade Balance of Malaysia: An Empirical Examination
Arize, Augustine | Ndubizu, Gordian
Credit and Capital Markets – Kredit und Kapital, Vol. 23 (1990), Iss. 1 : pp. 125–138
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Augustine Arize, Commerce/Texas
Gordian Ndubizu, Commerce/Texas
References
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Google Scholar -
Anderson, R. D., and Rasche, Robert (1982): “Why Do Money Market Models Tell Us About How to Implement Monetary Policy?” Journal of Money, Credit, and Banking 14: 812 – 815.
Google Scholar -
Bahmani-Oskooee, Mohsen (1985): “Devaluation and the J-curve: Some Evidence From LDCs.” Review of Economics and Statistics 85: 500 – 504.
Google Scholar -
Blau, David M. (1985): “The Effects of Economic Development on Life Cycle Wage Rates and Labor Supply Behavior in Malaysia.” Journal of Development Economics 19: 163 – 185.
Google Scholar -
Branson, William H. (1972): “The Trade Effects of the 1971 Currency Realignments.” Brookings Papers on Economic Activity 1: 15 – 69.
Google Scholar -
Darrat, A. F.: “Are Exports an Engine of Growth? Another Look at the Evidence.” Applied Economics 19: 277 – 283. Far Eastern Economic Review. Asia 1976 Yearbook.
Google Scholar -
Farley, I. U., and Hinich, M. J. (1972): “A Test for a Shifting Slope Coefficient in a Linear Model.” Journal of the American Statistical Association 65: 1302 – 9.
Google Scholar -
Feldman, R. A. (1982): “Dollar Appreciation, Foreign Trade, and the U.S. Economy.” Federal Reserve Bank of New York Summer: 1 – 9.
Google Scholar -
Felmingham, B. S. (1988): “Where is the Australian J-curve?” Bulletin of Economic Research 40: 1: 43 – 56.
Google Scholar -
Giles, D. E., and Smith, R. G. (1977): “A Note on the Minimum Error Variance Rule and the Restricted Regression Model.” International Economic Review 18: 247 – 251.
Google Scholar -
Goldstein, Morris, and Khan, Mohsin S. (1985): “Income and Price Effects in Foreign Trade.” In Jon s, Ronald W., and Kenen, Peter B. (Eds.), Handbook of International Economics, 2, Amsterdam: 1041 – 1105.
Google Scholar -
Goldstein, Morris and Khan, Mohsin S. (1976): “Large Vs. Small Price Changes in the Demand for Imports.” IMF Staff Papers 23: 200 – 225.
Google Scholar -
Goldstein, Morris, and Young, John (1979): “Exchange Rate Policy: Some Current Issues.” Finance and Development March: 7-10.
Google Scholar -
Hakkio, C. S., and Roberts, Richard (1987): “Has the Dollar Fallen Enough?” Federal Reserve Bank of Kansas City July/ August: 24 – 41.
Google Scholar -
Harvey, A. C. (1981): The Econometric Analysys of Time Series, Phillip Allan: Oxford.
Google Scholar -
Haynes, Stephen, and Stone, Joe A. (1979): “Impact of the Terms of Trade on the U.S. Trade Balance.” Review of Economics and Statistics 16: 702 – 706.
Google Scholar -
Hsiao, Cheng (1981): “Autoregressive Modelling and Money-Income Causality Detection.” Journal of Monetary Economics 7: 85 – 106.
Google Scholar -
Johnston, J. (1984): Econometric Methods, Third Edition, New York: McGraw-Hill.
Google Scholar -
Junz, Helen, and Rhomberg, Rudolf R. (1973): “Price Competitiveness in Export Trade Among Industrial Countries.” American Economic Review, Papers and Proceedings 63: 412 -418.
Google Scholar -
Krueger, Ann D. (1983): Exchange Rate Determination, Cambridge University Press: Cambridge.
Google Scholar -
Magee, Stephen P. (1973): “Currency Contracts, Pass Through and Devaluation.” Brookings Paper on Economic Activity, 303 – 325.
Google Scholar -
“Malaysia – A Time for Consolidation,” Supplement EUROMONEY, April 1987.
Google Scholar -
McPheters, LeeR. and Stronge, William B. (1979): “Impact of the Terms of Trade on the U.S. Trade Balance: A Cross-Spectral Analysis.” Review of Economics and Statistics 16: 451 -455.
Google Scholar -
Miles, Marc A. (1979): “The Effects of Devaluation on the Trade Balance and Balance of Payments: Some New Results.” Journal of Political Economy 87 June: 600 – 620.
Google Scholar -
New Straits Times (July 9, 1984): (Kuala Lumpur).
Google Scholar -
Rahman, Abdul Tuhku (1984): Contemporary Issues in Malaysian Politics. (Petaling Jaya: Pelanduk Publications).
Google Scholar -
Ram, R. (1985): “Exports and Economic Growth: Some Additional Evidence.” Economic Development and Cultural Change 33: 415 – 25.
Google Scholar -
Ramsey, J.B. (1969): “Tests for Specification Errors in Classical Linear Least Squares Regression Analysis.” Journal of the Royal Statistics Society Series B 31: 350 – 1.
Google Scholar -
Ramsey, J. B., and Gilbert, Roy (1972): “A Monte Carlo Study of Some Small Sample Properties of Tests for Specification Error.” Journal of American Statistical Association 67: 180 -186.
Google Scholar -
Schlegel, Charles C. (1981): “Development, Equity, and Level of Living in Peninsular Malaysia.” The Journal of Developing Areas 15: 297 – 316.
Google Scholar -
Schmidt, P., and Waud, R. N. (1973): “The Almon Technique and the Monetary Versus Fiscal Debate.” Journal of American Statistical Association 68: 11 – 19.
Google Scholar -
Spitaller, Erich (1980): “Short-Run Effects of Exchange Rate Changes on Terms of Trade and the Trade Balance.” IMF Staff Papers June: 320 – 48.
Google Scholar -
Thursby, J. G. (1981): “A Test Strategy for Discriminating Between Autocorrelation and Misspecification in Regression Analysis.” Review of Economics and Statistics 62: 117 – 123.
Google Scholar -
Thursby, J. G.(1979): “Alternative Specification Error Tests: A Comparative Study.” Journal of American Statistical Association 74: 222 – 225.
Google Scholar -
Thursby, J. G., and Thursby, Marie (1984): “How Reliable are Simple, Single Equation Specifications of Import Demand?” Review of Economics and Statistics 66: 120 – 128.
Google Scholar -
Ueda, Kazuo (1983): “Trade Balance Adjustment With Imported Intermediate Goods: The Japanese Case.” Review of Economics and Statistics 65: 618 – 625.
Google Scholar -
White, H. (1980): “A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity.” Econometrica 48: 817 – 38.
Google Scholar -
Wilson, A. L. (1978): “When is the Chow Test UMP?” The American Statistician 32: 66 – 68. – World Develvopment Report 1985 (1986).
Google Scholar
Abstract
Impact of the Terms of Trade on the Trade Balance of Malaysia: An Empirical Examination
This paper presents estimates of the impact of changes in terms of trade on Malaysia’s trade balance. The Almon lag procedure, Akaike final prediction error (FPE) and Theil’s residual variance criteria are used in the empirical estimation. The dependent variable in the preferred equation is the ratio of the value of imports to exports whereas the explanatory variables are terms of trade in domestic currency, high-power money, weighted income of trading partners and a trend variable. The empirical results suggest that the lag pattern on the terms of trade variable is not that of the typical J-curve process. In addition, over the sample-period, 1973: 1 through 1985: 4, there was no evidence that deterioration in terms of trade improved the trade balance.