Journal of Forest Economics > Vol 13 > Issue 4

The J-curve effect and the US–Canada forest products trade

Jungho Baek,
Suggested Citation
Jungho Baek (2007), "The J-curve effect and the US–Canada forest products trade", Journal of Forest Economics: Vol. 13: No. 4, pp 245-258.

Publication Date: 05 Nov 2007
© 0 2007 Jungho Baek
JEL Codes:F140L730
Autoregressive distributed lag approach to cointegrationExchange rateForest products trade balanceJ-curve effectSoftwood lumber


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In this article:
Theoretical framework 
Empirical models and data 
Empirical results 
Concluding remarks 


This paper examines the dynamic effect of the US–Canada exchange rate on bilateral trade of forest products between the two countries. Special attention is given to investigate the J-curve hypothesis: whether or not the trade balance for US forest products trade with Canada benefits from a decline in the value of the US dollar. We adopt the autoregressive distributed lag (ARDL) approach to cointegration to estimate quarterly bilateral trade data between the US and Canada from 1989 to 2005. We find little evidence of the J-curve phenomenon for US forest products trade with Canada.