Revisiting New Zealand Trade Balance and Exchange Rate: Evidence from Asymmetry Analysis

Hanafiah Harvey


Recent trends on empirical studies of trade balance and exchange rates, focusing on a non-linear approach, supply new insight in the case of New Zealand. The earlier empirical study is limited and unsuccessful in providing dedicated support for J-curve in the long run. This paper adds a new case study between New Zealand and its 13 trading partners. Following an innovative approach using the non-linear method supply rewarding results. The results show that the short-run effects of exchange rate changes are asymmetric in all models, but they also lasted into the long-run significant asymmetric effects in the cases of China, Hong Kong, Indonesia, and Switzerland.

Keywords: J-Curve, Non-linear ARDL approach, Asymmetry effects, New Zealand, trading partners.

JEL Classification F31, F32, F42, C10

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