- Title
- The asymmetric effects of the exchange rate on bilateral trade between the United Kingdom and Germany
- Creator
- Kamwiyo, Craig
- Subject
- Foreign exchange rate
- Subject
- Foreign trade regulation -- Great Britain
- Subject
- Foreign trade regulation -- Germany
- Subject
- Commercial treaties
- Date Issued
- 2024-04
- Date
- 2024-04
- Type
- Master's theses
- Type
- text
- Identifier
- http://hdl.handle.net/10948/65086
- Identifier
- vital:74021
- Description
- Brexit has given the United Kingdom greater autonomy over its international trade policies and as a result, there is a need to understand the dynamics around the effects of exchange rate on trade balances. Therefore, this study sought to investigate the effects of the pound to euro exchange rate on trade between the United Kingdom and Germany. In so doing, the study investigated the existence of the J-curve phenomenon in the bilateral trade balance. While most existing studies focus on aggregating the trade balance, this study considers disaggregating the trade balance at industrial level. Therefore, the disaggregated trade balance led to several unique studies catering for the twelve biggest industries that make up the trade balance. In addition, the study also does away with the assumption of linearity in the effects of exchange rate changes on the trade balance by making use of asymmetric analysis. For this purpose, the study uses the linear autoregressive distributed lag (ARDL) and the nonlinear autoregressive distributed lag (NARDL) models to analyse monthly data over the period of January 2010 to August 2022. The results provide evidence supporting the existence of the J-curve effect among linear ARDL and NARLD models. Furthermore, it was found that the exchange rate had an asymmetric effect on trade both in the short run and long run. All in all, the results in this study are industry-specific, indicating that the effects of both an appreciation and depreciation of the exchange rate on the bilateral trade balances vary across industries. Considering the J-curve effect identified in six cases, and greater trade elasticities following a depreciation, the government should advocate for expansionary monetary policy by lowering interest rates to improve the trade balance.
- Description
- Thesis (MCom) -- Faculty of Business and Economic Sciences, School of Economics, Development and Tourism, 2024
- Format
- computer
- Format
- online resource
- Format
- application/pdf
- Format
- 1 online resource (xii, 160 pages)
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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NMU School for Economics, Development and Tourism
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Kamwiyo, C April 2024.pdf | 1 MB | Adobe Acrobat PDF | View Details Download |