The J-curve and NAFTA: evidence from commodity trade between the US and Mexico
The North American Free Trade Agreement (NAFTA) was predicted to have a substantial impact on the US–Mexico trade, especially on specific importing and exporting industries. In this article, we use annual industry-level export and import data from 1962 to 2004 to discern both
the short- and long-run effects of real exchange-rate depreciation on the Mexico–US trade balance, as well as the effects of NAFTA on this trade. We find that peso depreciation has a positive long-run effect on 24 of 102 Mexican industries and a negative short-run effect on 19 of 102
industries. Only a small fraction (7 of 102 industries) show any support for the J-curve hypothesis. NAFTA has had a significant effect on a significant number of the industries, however.
Document Type: Research Article
Affiliations: 1: The Center for Research on International Economics, The University of Wisconsin-Milwaukee, PO Box 413 Milwaukee, WI 53201, USA 2: The Department of Economics, The University of Wisconsin-Milwaukee, PO Box 413 Milwaukee, WI 53201, USA
Publication date: 01 May 2011
- Editorial Board
- Information for Authors
- Subscribe to this Title
- Ingenta Connect is not responsible for the content or availability of external websites
- Access Key
- Free content
- Partial Free content
- New content
- Open access content
- Partial Open access content
- Subscribed content
- Partial Subscribed content
- Free trial content