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Empirical Test of the J-curve in China Using ARDL Bounds Test
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TitleEmpirical Test of the J-curve in China Using ARDL Bounds Test  
AuthorHuang Changli  
OrganizationCentral University of Finance and Economics 
Key WordsMarshall-Lerner Condition; J-curve effect; RMB’S REER; export and import 
AbstractConclusions on Marshall-Lerner condition and J-curve effect are mixed from literatures. It’s instructional to reexamine these hypotheses for the monetary authority to constitute exchange rate policy. This study analyze the long-run relationship of China’s export and import function based on general equilibrium model for the sample period 1997Q1-2013Q4, using ARDL bounds testing method. The results suggest that the general equilibrium model is better than partial equilibrium model; the export function, import function and trade balance function all are cointegrated and stable. There is clear evidence that RMB’s REER remarkably influences export and import, M-L condition hold, and the J-curve effect exists. This study also highlights some policy implications. 
Serial NumberWP706 
  • Institute of Economics, Chinese Academy of Social Sciences
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