Asymmetric Effects of Trade Balance Relative to Savings Rates and the Real Effective Exchange Rate: Markov-Switching Approach

Document Type : Research Paper


1 Associate Professor, Department of Economics, University of Tabriz

2 Professor, Department of economics, University of Tabriz

3 PhD student of International Economics, University of Tabriz


This study aimed to investigate the effect of nonlinear savings rate on Iran's trade balance using the Markov-switching approach during 1393-1360. The results show that savings rates have a negative effect in the first regime and The second regime has a positive effect on trade balance. The real effective exchange rate coefficients in the first and second regimes have a negative impact on the trade balance. In other words cause deterioration of the trade balance and the results confirmed lack of j curves in the time period under study.  Other results of the study showed that the asymmetric impact of trade openness and per capita GDP in the first and second regimes on the trade balance.
 JEL Classification: C22, F32 , O16, F31, F13


Main Subjects

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Volume 52, Issue 4 - Serial Number 121
January 2018
Pages 821-840
  • Receive Date: 09 April 2017
  • Revise Date: 16 June 2017
  • Accept Date: 19 September 2017
  • First Publish Date: 22 December 2017