Is there a long-run relationship between trade balance and terms of trade? The case of Malaysia

Wong, Hock Tsen (2006) Is there a long-run relationship between trade balance and terms of trade? The case of Malaysia. Applied Economics Letters, 13 (5). pp. 307-311. ISSN 1350-4851

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URL: http://dx.doi.org/10.1080/13504850500393428

Abstract

This study investigates the relationship between trade balance and terms of trade in Malaysia. It employs commodity terms of trade and income terms of trade. The results show that there is a long-run relationship between trade balance and commodity terms of trade. However, there is no long-run relationship between trade balance and income terms of trade. Commodity terms of trade and income terms of trade are found respectively to Granger cause trade balance and not vice versa. Thus, a change in terms of trade will have an impact on trade balance in Malaysia. In the long run, the impact of terms of trade on trade balance is depending on the measure of terms of trade.

Item Type:	Article
Keyword:	Current account deficits, Time-series, Unit-root, Identification, Cointegration, Shocks, Real
Subjects:	H Social Sciences > HG Finance > HG1-9999 Finance > HG3810-4000 Foreign exchange. International finance. International monetary system
Department:	SCHOOL > School of Business and Economics
Depositing User:	ADMIN ADMIN
Date Deposited:	04 Oct 2011 17:42
Last Modified:	19 Oct 2017 09:23
URI:	https://eprints.ums.edu.my/id/eprint/1108

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