The US state-level geographic J-curve hypothesis mapping with Canada

Serdar Ongan, Ismet Gocer, Huseyin Karamelikli

Research output: Contribution to journalArticlepeer-review

Abstract

This study creates a US state-level asymmetric J‑curve hypothesis testing map with Canada. The map may visually present how a US state policymaker manages bilateral trade balances with Canada. Green-colored US states support the evidence of the asymmetric J‑curve hypothesis, while red-colored and gray-colored states do not. The main empirical finding indicates that the asymmetric J‑curve hypothesis is supported for only 15 US states and D.C., shown in green on the map. This suggests that policymakers of these US states may have more sustainable and manageable bilateral trade policies with Canada. If so, policymakers in red/grey US states should reevaluate their bilateral trade policy regulations, especially those related to taxation, budgetary frameworks, energy prices, and other relevant factors that can impact consumer-producer prices and thereby create competitive state-level real exchange rates. By doing so, they may achieve the anticipated positive outcomes of the J‑curve effect to export more.
Original languageEnglish
Pages (from-to)203-240
Number of pages38
Journal Review of Regional Research
Volume43
Issue number2
Early online date11 May 2023
DOIs
Publication statusPublished - 31 Aug 2023

Keywords

  • Canada
  • Nonlinear ARDL Model
  • Regional J‑curve
  • US State-level J‑curve Hypothesis Testing
  • USA

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