Dissertation Research Proposal A/07/268 1
1. INTRODUCTION
This fragment provides an initiation to the research problem and gives a distinctive
impression to the behavior of the exchange rate and the trade balance.
1.1. BACKGROUND OF THE STUDY
It is proposed to launch this study to investigate the exchange rate* behavior on trade
balance in Sri Lanka by using its 10 major trading partners. These partner countries are
selected by calculating the trade share. They are; USA, India, UK, Singapore, Japan,
Germany, Hong Kong, Iran, China and Saudi Arabia. Considering these countries the
effective exchange rates are calculated.
The exchange rate is one of the most important policy variables, which determines the
trade flows, capital flows, inflation, international reserve and remittance of an economy.
Exchange rate is the value of one currency in terms of another currency. The exchange rate
fluctuations can be seen in the floating exchange rate regimes and managed floating exchange
rate regimes. Sri Lanka is experienced depreciation except few years. The factors which are
affecting to the exchange rate movements are relative interest rate, relative inflation level,
relative income levels and etc. If we consider the Sri Lankan situation at the independence a
fixed exchange rate regime was operated linked to the Sterling Pound. And Since 1950s the
exchange rate was fixed. The direct regulations were imposed on foreign trade by the
socialist government in 1970-977. And the trade liberalization in 1997 leads the country to
follow a flexible exchange rate system. The rupee has continuously depreciated except the
years 2005, 2008 and 2010.
The dependent variable, trade balance** can be defined as the difference between exports
and the imports. This is also known as the Net Exports (NX). This trade balance is a
component of the Balance of Payments of a country.
*Exchange Rate: value of one currency in terms of another currency. **Trade Balance: The difference between the monetary values of exports and imports.
Dissertation Research Proposal A/07/268 2
There are two major accounts in the Balance of Payments*. Those are Current Account**
and the Capital Account. The Trade Balance will be the first quarter of the current account
and it only records the exports and the imports. The trade balance can be negative, positive or
zero. Negative trade balance is occurred, when the imports exceed the exports. And when the
exports are greater than the imports there will be a trade surplus. Trade Balance will be
balanced when the exports are exactly equal to the imports. In Sri Lanka, after 1977 the
deficit was grown and it was filled by heavy borrowings. It is said that the Sri Lanka’s
Balance of trade in a Chronic deficit all over the period.
The relationship between these variables is generally measured using the behavior of the
Real Exchange Rate (RER) in terms of bi-lateral trade and Real Effective Exchange Rate
(REER) in multi-lateral trade and the impact is measured by some specific analytical tools.
Although there are number of other criterion used to measure the impact of exchange rate on
trade balance, to fill the research gap, it is proposed to use mainly the Granger Causality Test
in this research.
As a specific objective of this study it is proposed to investigate the validity of Marshal-
Learner Condition in Sri Lanka. According to the M-L condition, A depreciation of a
country’s currency will improve the current account balance if the sum of the price elasticity
of domestic and foreign demands for imports is larger than unity.
(Ie + Xe) >1
Ie Import Elasticity
Xe Export Elasticity
*Balance of payments: are the accounts which record foreign transactions systematically. **Current Account: shows all the flows that directly affect the national income.
Dissertation Research Proposal A/07/268 3
1.2. BEHAVIOR OF THE VARIABLES
Behavior of the main variables over 33 years (1977-2010) reflected by the below graphs.
The Exchange Rate Behavior of Sri Lanka’s major trading partners against LKR
1 4 7 10 13 16 19 22 25 28 310
10
20
30
40
50
60
70
80
90
100
USAIND RSJAPANUKSINGAPOREGERMANYHONGKONGIRANCHINASAUDHI ARABIA
Sri Lanka’s Trade Balance Behavior
1 4 7 10 13 16 19 22 25 28 31 34
-10000
-5000
0
5000
10000
15000
20000
EXPORTSIMPORTSTrade Balance
According to the literature there is a considerable relationship between these two
variables in Sri Lanka. Depreciation has been instrumental in making a favorable impact on
the trade balance (Wijesinghe 1988). And also Silva & Zen (1998) found that the exchange
rate policy after 1977 has improved the trade balance but has failed to stimulate real output at
least in the short run. These things are widely discussed under the literature review.
Dissertation Research Proposal A/07/268 4
2. LITERATURE REVIEW.
2.1. EMPIRICAL STUDIES IN SRI LANKA.
According to De Silva D.G. and Zen Zhu (1998), the changes in Sri Lanka’s Trade
Balance affected by changes in the exchange rate since 1977. This study has shown that it is
impossible to detect any positive effect on GDP in Sri Lanka due to currency depreciation*.
The study period was 1977-1997.VAR Analysis has been used to identify shocks and fully
control important external shocks that affect economic performance. There were two
exogenous variables used as Government Expenditure and Foreign Direct Investment. And
endogenous variables were GDP, Trade Balance, Nominal Interest Rate and CPI. The Co
integration model was estimated, which comprised of four endogenous variables (GDP,
Trade Balance, CPI, Real Exchange Rate). Then by adding one variable at a time, the study re
estimated the model and investigates the effects of exchange rate on Trade Balance and GDP.
And also allowed for determination of the stability of the results.
Wijesinghe D.S.(1988) has found that the Nominal Exchange Rate changes has
caused improvements in Sri Lankan Trade Balance in most of the years (study period 1971-
1985). And the improvements were largely contributed by the depreciation of the Sri Lankan
rupee. The Trade Balance effect of real exchange rate changes had not been so impressive
due to the high rates of inflation which prevailed in Sri Lanka in most of the years. The effect
of the unfavorable price changes on export earnings were moderated or more than
compensated for by the depreciation of the Sri Lankan rupee which induced increased in the
export volume. In the case of real exchange rate changes, the price of imports recorded
increases in most of the years. The movements of the index of nominal effective exchange
rate computed with the trade balance objective closely reflected the effect of exchange rate
changes on Sri Lanka’s trade balance. He has calculated Effective Exchange Rates by using
the variables, exports, imports etc.
Dissertation Research Proposal A/07/268 5
Further, W.T.K.Perera (2009) has done this study to find the impact of real
depreciation of SLR on the trade balance in the short run and the long run (1970-2008),
employing bilateral trade data between Sri Lanka and its six major trading partners. There
was no specific pattern for the trade balance between Sri Lanka and its trading partners in
response to the change in real exchange rate, and none of the cases supported the J-curve
phenomenon. In the long run, only in the cases of India and Singapore has there been a
positive and significant impact on trade balance with the depreciation of the SLR. This study
emphasized that Sri Lanka has to take action to improve its income from exports and reduce
the expenditure on imports to overcome the problem in the trade deficit. The study also
revealed that both domestic and trading partners’ real incomes were important determinants
of Sri Lanka’s trade balance.
2.2. EMPIRICAL STUDIES IN OTHER COUNTRIES
Nusrate Aziz (2008) have done the Bangladesh study for 1972-2005 study period.
Mainly he has found that the Real Exchange rate has a positive effect on Balance of Trade in
in Bangladesh in the long run. Both the Engle-Granger and the Johansen test confirmed the
presence of a long run co integrating relationship among the variables of interest in the study.
The study also suggested that the real exchange rate has a significant impact on balance of
trade of Bangladesh both in the short-run and long-run. The Granger causality test proved the
causal relation between exchange rate and balance of trade of Bangladesh. The IRF also
supported the above mentioned positive impact of real effective exchange rate on balance of
trade in the long run. The study clearly indicated that real depreciations of exchange rate have
been positively associated with improvement of balance of trade. In the first step the long-run
equilibrium relation among the variables has been estimated. In the second step, they tested
the order of integration of residuals using ADF statistic.
Dissertation Research Proposal A/07/268 6
The study done by Ng Yuen-Ling (2008) attempted to identify the relationship
between the real exchange rate and trade balance in Malaysia from year 1955 to 2006. This
study used Unit Root Tests, Co integration techniques, Engle-Granger test, Vector Error
Correction Model (VECM), and impulse response analyses. The main findings of this paper
were: (i) long run relationship exists between trade balance and exchange rate. Other
important variables that determine trade balance such as domestic income showed a long run
positive relationship between trade balances, and foreign income shows a long run negative
relationship (ii) the real exchange rate was an important variable to the trade balance, and
devaluation will improve trade balance in the long run, thus consistent with Marshall-Lerner
condition (iii) the results indicate no J-curve effect in Malaysia case. In this research, the
results supported the empirical validity of the Marshall-Lerner condition through VECM,
indicating that depreciation has improved the trade balance.
Pavle Petrovic (2009) has found that exchange rate depreciation in Serbia improved
trade balance in the long run (2001-2007), while giving rise to a J-curve effect in the short
run. Both Johansen’s and autoregressive distributed lag approach were respectively used
giving similar long-run estimates showing that real depreciation improved trade balance.
Corresponding error correction models as well as impulse response functions indicated that,
following currency depreciation, trade balance first deteriorated before it later improves,
exhibiting the J-curve pattern. The main findings of the paper were that a real exchange rate
depreciation has a significant positive long run impact on the trade balance in Serbia, and that
in the short run trade balance first deteriorated before it later improves. The corresponding
error correction models (ECM) of trade balance captured its short run movements and
indicated the existence of the J-curve effect.
Dissertation Research Proposal A/07/268 7
The Japanese study is done by Shao Zaiwei (2008) and identified the major economic
factors that influenced the bilateral trade balance between Japan and the US. Differing from
conventional elasticities approach, one more variable the net foreign assets were added in the
Vector Auto regression estimation using quarterly data from 1980: I to 2006: IV. The
Johansen and Juselius result indicated three long-run relationships among five macro
variables: trade balance, domestic income, foreign income, net foreign assets and real
exchange rate. Short run adjustment parameters were identified as coefficients of the error
correction terms. The main finding of this paper was that taking the valuation effect of the net
foreign asset position into account, the final effect of the exchange rate changes on trade
balance was undetermined. Although appreciation could reduce trade surplus in the short run,
in a longer horizon, there was no stable relationship. Besides that, Granger causality
procedure is carried out to investigate the causal relationship and directions of causality
between the variables. Finally, Impulse Response Analysis and Variance Decomposition
procedure are performed to provide more insight into short run interaction between trade
balance and those endogenous variables in the system.
Suleiman Monammad (2010) done this study and identified the depreciation of
domestic currency lead to unexpected falls in eport earnings in Pakistan. The study examined
validity of the Marshall Lerner condition in Pakistan data (1970-2008) by using impulse
response function which fulfills the J- curve idea. To evaluate long run association among the
variables by employing Johansson Co integration test. The end consequence of test showed
that there was a long run relationship among the variables at vector two. The finding of this
research paper showed that real depreciation of exchange rate has positively impact on
balance of trade. So the depreciation is in favor of Pakistan’s export.
Dissertation Research Proposal A/07/268 8
Tihomir Stucka (2004) done his research for 1994-2002 and used a reduced-form
model approach was used to estimate the trade balance response to permanent domestic
currency depreciation in Croatia. For this purpose, long-run and short-run effects were
estimated, using three modeling methods along with two real effective exchange rate
measures. Evidence of the J-curve was also found. This attempted to estimate the impact of a
permanent exchange rate depreciation on the merchandise trade balance employing a reduced
form model. The model was estimated using three methods - the ARDL "delta" approach
developed by Pesaran, Shin, and Smith (1996). This study found evidence of the J-curve
effect in Croatia. The increase of the trade balance deficit as a consequence of the J-curve
effect is estimated to be between 2.0 percent and 3.3 percent. The empirical results were
consistent with the exception of one model. Overall, intuitively it seemed unlikely that a
permanent nominal depreciation of the domestic currency embodied in an asymmetric
intervention policy a pegged exchange rate regime would have a net favorable effect on the
entire economy, taking into account potential negative side effects.
Further Quio, H., (2005) did his study for East Asian Economies for the time period
of 1978-2004, to identify the post impact of a discrete exchange rate change and its
implications for net trade balance. He emphasized the difference between dollar debtor and
dollar creditor countries and concluded that even though currency devaluation may improve
the trade balance of a debtor country, appreciation may or may not reduce the surplus of a
creditor country. It was therefore inappropriate to follow the elasticity models to use
exchange rate to adjust trade balance predictably when the wealth effect, investment effect
and indirect investment effect (in East Asia) were all considered. His model attested that
such a move may not induce a reduction in the trade surplus.
Dissertation Research Proposal A/07/268 9
Sekantsi. L.(2008), empirically examined the impact of real exchange rate volatility
on trade in the context of South Africa’s exports to the U.S. for the South Africa’s floating
period January 1995-February 2007. In measuring real exchange rate volatility, this study
utilized GARCH. After establishing the existence of cointegration among the variables
involved in our two-country export model, he estimated long-run coefficients by means of
ARDL bounds testing procedure proposed by Pesaran, et al.(2001). His results indicated that
real exchange rate volatility exerts a significant and negative impact on South Africa’s
exports to the U.S. Therefore, stable and competitive exchange rate and sound
macroeconomic fundamentals were required in order to improve international
competitiveness and greater penetration of South African exports to international markets.
Monacelli,T., & Perotti,R.,(2006) employed structural VAR techniques to estimate,
for a series of OECD countries. They have found that in all countries a rise in government
spending induces a real exchange rate depreciation and a trade balance deficit. In the US,
however, the effect on the trade balance is small. They have shown how recent empirical
evidence that points to a decline in the trade deficit after a budget deficit shock can be traced
to an alternative method to recover the fiscal shocks. Second, in all countries private
consumption rose in response to a government spending shock, and therefore co-moves
positively with the real exchange rate.
Dissertation Research Proposal A/07/268 10
2.3. RESEARCH GAP
De Silva D.G. and Zen Zhu (1998), has not speculated the causal relationship between the
exchange rate and the trade balance. And his study stands for 1977-1997. No studies were
conducted to fill this time gap (1997-2010). Wijesinghe D.S.(1988) analyzed his findings by
calcualating the Effective Exchange Rates, but has not used any of the econometric tools for
the analysis. And his study flows for the period 1971-1985. Silva has filled his time gap by
12 years (1985-1997). But no studies have been done to fill the remaining 13 years.
W.T.K.Perera (2009) has found the impact of real depreciation of SLR on the trade balance
in the short run and the long run by using its 6 major trading partners. And he has employed
mainly the J curve phenomenon. In this study it is proposed to add 4 more major trading
partners (Singapore, Iran, China and Saudi Arabia) and more econometric tools are proposed
to use.
The geographical gap can be taken from the empirical studies in the other countries,
and also throughout the literature there is no study has done for the causal impact of exchange
rate on trade balance except the Malaysian case. Other than that the trade balance behavior
due to the external shocks is not investigated for the Sri Lankan case.
Considering these gaps, it is proposed to fill them by employing the Granger Causality
test and the Impulse Response Function. And the other econometric tools will be applied for
the performance of the study. As a result of these applications, the time gap will be
instinctively filled.
Dissertation Research Proposal A/07/268 11
3. PROPOSED RESEARCH
3.1. RESEARCH PROBLEM
Based on the research gap which is identified by the literature, it is proposed to investigate
whether the exchange rate has a significant impact on trade balance in Sri Lanka. Then the
fundamental research problem will be;
Do the Exchange Rate changes affect the trade balance effectively?
Two macroeconomic variables are used in this research, namely Exchange Rate and Balance
of Trade. And the literature proves that there is a significant impact of exchange rate on trade
balance in Sri Lanka.
The exchange rate policy after 1977 has improved the trade balance, but has failed to
stimulate real output at least in the short run (Silva D. & Zhen Z. 1998).Depreciation has
been instrumental in making a favorable impact on the trade balance during the study period
except for the years 1971, 1979,1985 (Wijesinghe D.S. 1988).
Therefore, it is investigated that the exchange rate affects the balance of trade in Sri Lanka.
But there were no studies done to fill the time gap after 1997. Furthermore the causal impact
is not found. Then this study is done to fill these gaps by mainly using the Granger Causality
Test, Impulse Response Function and the other econometric tools.
In addition to the above fundamental research problem, it is proposed to identify the
existence of Marshal-Learner Condition by elasticity approach. Other than that the existence
of J curve phenomenon has to be identified.
Dissertation Research Proposal A/07/268 12
3.2. HYPOTHESIS
Impact of exchange rate changes on trade balance.
H0: Exchange Rate Changes do not affect the Trade balance.
H1: Exchange Rate depreciation improves the trade balance.
Existence of Marshal Learner Condition in Sri Lanka.
H0: Depreciation will not improve the trade balance even though the condition is hold.
H1: Depreciation will improve the current account if the sum of the price elasticity of
domestic and foreign demands for imports is larger than unity.
3.3. OBJECTIVES
Main Objective
To investigate the impact of exchange rate changes on trade balance in Sri Lanka.
Specific Objectives
To analyze the time series properties of the variables used in this study.
To understand the behavior of the variables in Sri Lanka.
To analyze the short run and long run effect of exchange rate changes on the trade.
To investigate the existence of Marshal Learner condition in Sri Lanka.
To identify the J curve phenomenon in Sri Lanka.
To suggest the policy implications.
Dissertation Research Proposal A/07/268 13
3.4. IMPORTANCE OF THE STUDY.
The LKR is continuously depreciated all over the study period except some years. It is
expected that this would improve the trade balance, reduce inflation, and increase the rate of
output. The importance of this study lies in the evaluation of currency devaluation as a long-
term developmental policy in Sri Lanka that can serve as a model for other country studies.
The Central Bank uses devaluation as a policy tool for economic growth. Therefore if there is
such a relationship found, it can be mainly beneficial for two parties. Those are;
i. Policy Makers
The Trade Balance is the dependent variable. It is a component of the Balance of Payments.
Therefore Balance of Payments can significantly influence the country’s GDP. The GDP will
determine the health of an economy. Then if a relationship found between the trade balance
and exchange rate, it can be manage in policy making.
ii. Exporters
When the exchange rate is devaluated, the domestic currency will be weaker against the
foreign currency. And the local exporters are benefited. And If there is such a relationship is
investigated, it can be positively applied to the predictions of these exporters.
Dissertation Research Proposal A/07/268 14
4. METHODOLOGY
This fragment concise the main variables, the frequency of data, the source of data study
period, and the econometric methods.
4.1. MAIN VARIABLES
Several variables are used in the calculations. Namely, exports, imports, trade share,
consumer price index, GDP, GDP deflator, Nominal Exchange Rate, Real Exchange Rate,
Nominal Effective Exchange Rate and Real Effective Exchange Rate.
I. Exports and Imports
These are the basic variables in this study. All the calculations are based on exports and
imports. Exports are used to calculate the Export Share and the Export Share is used in
calculating Effective Exchange Rates. Imports are used to calculate the Import share and it is
used to calculate the Effective Exchange Rates.
II. Trade share
X= Exports
M= Imports
i = Major trading partners
Using this equation the major 10 trading partners are found. Those are;
USA, India, Japan, UK, Singapore, Germany, Hong Kong, Iran, China and Saudi Arabia.
Trade Share =(X+M ) i
total (X+M )d
Dissertation Research Proposal A/07/268 15
III. Consumer Price Index(CPI)
Consumer Price Index is used to convert the nominal terms into the real terms. In this
research two basic real terms are calculated. Those are the Real Exchange Rate and the Real
Effective Exchange Rate. To do these calculations the Consumer Price Index will be used.
IV. Nominal Exchange Rate
The nominal exchange rate is used to calculate the other RER, NEER & REER. It includes
the inflationary impact.
V. Real Exchange Rate
The RER between two currencies is the product of the nominal exchange rate. It is calculated
by using the Nominal Exchange Rate.
VI. Nominal Effective Exchange Rate (NEER)
The Nominal Effective Exchange Rate measures the average change of a country’s exchange
rate against all other currencies.
R= Exchange Rate ( major trading partners)
W= Trade Share
NEER=∏j=1
m
r1j
W j
Dissertation Research Proposal A/07/268 16
VII. Real Effective Exchange Rate (REER).
The Real Effective Exchange Rate adjusts NEER by appropriate foreign price level and
deflates by the Sri Lankan price level.
Pdi= Domestic CPI
Pfi= Foreign CPI
R = Exchange Rate
4.2. FREQUENCY AND SOURCE OF DATA
Data come from the Central Bank (CBSL) Annual Reports, IMF Publications and
Econstat data of the World Bank. All the data are in US Dollar Billions. The
study employed 33 annual observations (1977-2010) of Sri Lanka and the
annual data is used because quarterly data of some relevant variables are
not available.
4.3. STUDY PERIOD
The study period is 1977-2010, Because the Exchange rate and the trade balance become
substantial with the trade liberalization in 1977.
REER=∏j=1
m
(r PdiPfij
)wi
Dissertation Research Proposal A/07/268 17
4.4. THE MODEL
This study attempts to develop a similar model applied by Aziz N.(2008)
for Bangladesh, that the trade balance is a function of real exchange rate
and the domestic and foreign real income. A log-linear specification of the
model can be stated as follows:
lnTB = β0 + β1 lnREER + β2 lnY+ β3 lnY*+ ui
Where, lnTB, lnX, lnM imply logarithm of balance of trade (lnX-lnM),
exports and imports at time respectively. lnREER, InY, In Y* are logarithm of
real effective exchange rate, Real GDP and world real industrial production
index (proxy of trade partners income).
Dissertation Research Proposal A/07/268 18
4.5. ECONOMETRIC TOOLS
I. Granger Causality Method
The Granger causality test is a statistical hypothesis test for determining whether one time
series is useful in forecasting another. There is an interpretation of a set of tests as revealing
something about causality. To identify the causal impact of exchange rate on Balance of
Trade, the Granger Causality Test can be applied.
II. Impulse Response Functions (IRF)
This can be used to measure the trade balance behavior due to the external shocks. This
represents the reactions of the variables to shocks hitting the system. And this test is tested to
identify the trade balance behavior due to the external shocks. An impulse response refers to
the reaction of any dynamic system in response to some external change (Lin, 2006). It is an
essential tool in this empirical causal analysis.
III. Graphical methods and summary statistics
The variables can be described by the graphical methods and summary statistics. There are
various variables are used in this research. And all the data is having the time series property.
There is a pattern of observed time series data. When the pattern is identified, the
interpretation can be done. The graphical methods and Summary statistics can be used to
show this relationship in a visible and understandable manner. So it can be used in analyzing
the results of this research.
IV. Vector Auto Regression
Dissertation Research Proposal A/07/268 19
This can be used to check the linear interdependencies among multiple time series and can be
used in structural models with simultaneous equations.
V. Unit Root Test
To identify the order of time series properties of this study unit root test is proposed to
employ. To test the stationary of the time series this is basically used. If one or both of the
series are non-stationary, the standard OLS approach will produce a spurious regression, thus
rendering standard testing techniques invalid (Fuei, 2007).
VI. Johansen’s Cointegration Method
This is a non stationary method. This study employs Johansen’s Cointegration method to
investigate both long-run and short-run relationship between the Exchange rate and the trade
balance.
VII. Autoregressive Distributed Lag Model (ARDL Model)
This study also employs ARDL model to investigate the long-run relationship Exchange Rate
and Trade Balance. This method does not require both variables to be non-stationary at the
same level or integrated in the same order.
VIII. Error Correction Model
An error correction model is a dynamical system with the characteristics that the deviation of
the current state from its long-run relationship will be fed into its short-run dynamics. A
rough long-run relationship can be determined by the cointegration vector, and then this
relationship can be utilized to develop a refined dynamic model.
Dissertation Research Proposal A/07/268 20
REFERENCES
I. Rose, A. K., (1991), The role of exchange rate in a popular model of international
trade: Does the Marshall-Lerner condition hold? Journal of International Economics,
30, 301-316.
II. Santos-Paulina, A. U. (October, 2002), Trade Liberalization and Export Performance
in Selected Developing Countries, Journal of Development Studies, 39:1, 140-164.
III. Weerasekara, Y.M, (1992), Nominal and Real Effective Exchange Rates for the
SEACEN Countries: The South East Asian Central Banks (SEACEN).
IV. De Silva, D.K, (1998), Sri Lanka’s Experiment with Devaluation: The International
Trade Journal, Volume 16, No.04.
V. Wijesinghe, D.S.,(1988), Effective Exchange Rate Changes and their Impact on the
Trade Balance: SEACEN Research and Trainig Unit, Kuala Laumpur.
VI. Aziz, N.,(2008),The Role of Exchange Rate in Trade Balance: Empirics from
Bangladesh, C22,F31.
VII. Qioy, H., (2005), Exchange Rates and The Trade Balances Under the Dollar
Standards: Stanford Center for International Development, Working Paper 05.
VIII. Shao,Z.,(2008), Exchange Rate Changes and Trade Balance; An Empirical Study of
the Case of Japan, Dissertation and Theses collection, Singapore Mangement
University.
Dissertation Research Proposal A/07/268 21
IX. Ling,N.Y.,(2008), Real Exchange Rate and Trade Balance Relationship: International
Journal of Business and Management, Vol.3.,No8.
X. Pavle, P.,(2009),Exchange Rate and Trade Balance: Panoeconomics, 2010,1,pp23-41.
XI. Mohammad, S.D., The Role of Exchange Rate Changes on Trade Balance: Emperical
from Pakistan, European Journal of Social Sciences, Vol.14, no.1, 2010.
XII. Sekansti, L.,(2008), The Impact of Real Exchange Rate Volatility on South African
Exports to the United States: National University of Lesotho, JEL Classification: F10,
F31.
XIII. Monacelli,T., & Perotti,R.,(2006),Fiscal Policy, the Trade Balance, and the Real
Exchange Rate: Implications for International Risk Sharing.
XIV. WWW. Wikipedia .com.
APPENDICES
Some of the data which have been collected by this time are attached in this section.
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