Title:

Examining the J-curve and S-curve patterns in Pakistan’s economic ties with the USA and China, the world’s economic giants

Group publication title:

Argumenta Oeconomica

Creator:

Jing, Jin ; Ahmad, Riaz ; Usman, Muhammad ; Iqbal, Javed ; Ahmad, Sareer ; Gul, Azeem ; Mi, Hong ; Abdirasulova, Zhainagul ; Mamadievich, Ravshanbek Dzhumaev

Subject and Keywords:

USA ; S-curve ; J-curve ; China ; currency depreciation ; 3-digit industries ; Pakistan

Description:

Argumenta Oeconomica, 2025, Nr 2 (55), s. 233-247

Abstrakt:

Aim: Since the Jand S-curve concepts were first introduced, several researchers have tried to test their validity through empirical research. To offer recommendations for additional research, this study looked at the relevant literature. Methodology: The idea of the S-curve is an extension of the J-curve, which shows how the trade balance improves over time despite initially being worse due to currency depreciation. According to the S-curve hypothesis, there is a positive cross-correlation between the current exchange rate and the future trade balance of a country, and a negative cross-correlation between the current exchange rate and the past trade balance. To understand the pattern of the relationships, the author considered time series data for fifteen 3-digit industries/commodities between Pakistan and its main trading partners – China and the USA – from 1980 to 2022. Results: The results demonstrate that the minority of Pakistani industries, engaged in trade with the USA and China, supported J and S-curves behaviour. Implications and recommendations: The study showed that improving the trade balance is not always possible with domestic currency devaluation. Originality/Value: This study made an incremental contribution in that it critiqued a consumer price index (CPI) which has been used in literature on the aggregate level, and constructed commodity-based CPI for the analysis.

Publisher:

Publishing House of Wroclaw University of Economics and Business

Place of publication:

Wroclaw

Date:

2025

Resource Type:

artykuł

Resource Identifier:

doi:10.15611/aoe.2025.2.15

Language:

eng

Relation:

Argumenta Oeconomica, 2025, Nr 2 (55)

Rights:

Pewne prawa zastrzeżone na rzecz Autorów i Wydawcy

Access Rights:

Dla wszystkich zgodnie z licencją

License:

CC BY-SA 4.0

Location:

Uniwersytet Ekonomiczny we Wrocławiu