Is there a J-curve for Azerbaijan? New evidence from industry-level analysis

摘要

This paper estimates the J-curve for Azerbaijan using quarterly industry-level data over the 2000-2009 period. Empirical results show that in 3 of the 10 strategic industries there is strong evidence for the fulfilment of the Marshall-Lerner condition, as the trade balance improves in the long run in reaction to a currency devaluation. In most industries the J-curve pattern is observed in the short run. All 10 cases exhibit long-run cointegration and are stable according to the CUSUM and CUSUMSQ stability tests. These findings are largely consistent with the existing literature on the Azerbaijani J-curve and carry important policy implications.