Asymmetric effects of U.S. monetary policy on the U.S. bilateral trade deficit with China: A Markov switching ARDL model approach

Adler, 2017, Tipping the scale? The workings of monetary policy through trade Baak, 2008, The bilateral real exchange rates and trade between China and the U.S, China Economic Review, 19, 117, 10.1016/j.chieco.2008.02.003 Bae, 2012, The evolution of the monetary policy regimes in the U.S, Empirical Economics, 43, 617, 10.1007/s00181-011-0492-x Bahmani-Oskooee, 1992, What are the long-run determinants of the U.S. Trade balance?, Journal of Post Keynesian Economics, 15, 85, 10.1080/01603477.1992.11489927 Bilquees, 1989, Monetary approach to balance of payments: The evidence on reserve flow from Pakistan, Pakistan Development Review, 28, 195, 10.30541/v28i3pp.195-206 Cakan, 2015, Does U.S. macroeconomic news make emerging financial markets riskier?, Borsa Istanbul Review, 15, 37, 10.1016/j.bir.2014.10.002 Cheng, 2012, A monetary model of China–US trade relations, Economic Modelling, 29, 233, 10.1016/j.econmod.2011.10.002 Chiu, 2019, Trade balance, savings rate, and real exchange rate: Evidence from China and its trading partners, Emerging Markets Finance and Trade, 55, 351, 10.1080/1540496X.2018.1431882 Diebold, 1999, Multivariate density forecast evaluation and calibration in financial risk management: High-frequency returns on foreign exchange, The Review of Economics and Statistics, 81, 661, 10.1162/003465399558526 Duasa, 2007, Determinants of Malaysian trade balance: An ARDL bound testing approach, Global Economic Review, 36, 89, 10.1080/12265080701217405 Erceg, 2005, Expansionary fiscal shocks and the US trade deficit∗, International Finance, 8, 363, 10.1111/j.1468-2362.2005.00164.x Feldstein, 2008, Resolving the global imbalance: The dollar and the U.S. Saving rate, The Journal of Economic Perspectives, 22, 113, 10.1257/jep.22.3.113 Findlay, 1977, Intermediate imports and macroeconomic policy under flexible exchange rates, Canadian Journal of Economics/Revue Canadienne d’Economique, 10, 208, 10.2307/134439 Frenkel, 1971, A theory of money trade and the balance of payments in a model of accumulation, Journal of International Economics, 1, 159, 10.1016/0022-1996(71)90054-7 Frenkel, 1975, Portfolio equilibrium and the balance of payments: A monetary approach, The American Economic Review, 65, 674 Hale, 2008, Reconsidering revaluation: The wrong approach to the U.S.-Chinese trade imbalance, Foreign Affairs, 87, 57 Hamilton, 1989, A new approach to the economic analysis of nonstationary time series and the business cycle, Econometrica: Journal of the Econometric Society, 57, 357, 10.2307/1912559 Hamilton, 1989, A new approach to the economic analysis of nonstationary time series and the business cycle, Econometrica, 57, 357, 10.2307/1912559 Himarios, 1985, The effects of devaluation on the trade balance: A critical view and re- examination of mile’s ‘new results’, Journal of International Money and Finance, 4, 553, 10.1016/0261-5606(85)90029-4 Himarios, 1989, DO devaluations improve the trade balance? The evidence revisited, Economic Inquiry, 27, 143, 10.1111/j.1465-7295.1989.tb01169.x Huang, 2010, Monetary policy and trade imbalance adjustment, Journal of Chinese Economics and Business Studies, 8, 269, 10.1080/14765284.2010.493641 Huang, 2007, The effect of Fed monetary policy regimes on the US interest rate swap spreads, Review of Financial Economics, 16, 375, 10.1016/j.rfe.2006.05.002 Johnson, 1972, The monetary approach to balance-of-payments theory, Journal of Financial and Quantitative Analysis, 7, 1555, 10.2307/2329935 Johnson, 1977, The monetary approach to the balance of payments: A nontechnical guide, Journal of International Economics, 7, 251, 10.1016/0022-1996(77)90039-3 Kim, 2014, The U.S.–China trade deficit, International Trade Journal, 28, 65, 10.1080/08853908.2013.814555 Koray, 1999, Monetary shocks, the exchange rate, and the trade balance, Journal of International Money and Finance, 18, 925, 10.1016/S0261-5606(99)00031-5 Laffer, 1972, Monetary policy and the balance of payments, Journal of Money, Credit, and Banking, 4, 13, 10.2307/1991400 Liu, 2018, Understanding the U.S.-China Trade War, China Economic Journal, 11, 319, 10.1080/17538963.2018.1516256 Li, 2018, Incomplete exchange rate pass-through: Evidence from exchange rate reform in China, Emerging Markets Finance and Trade, 54, 690, 10.1080/1540496X.2016.1243940 Ma, 2017, Contribution of interest rate control to China’s economic development, Journal of Chinese Economics and Business Studies, 15, 325, 10.1080/14765284.2017.1342057 McKinnon, 2007, The US current account deficits and the dollar standard’s sustainability: A monetary approach Meng, 2018, Determinants of China’s bilateral trade balance in global value chains, Journal of International Trade & Economic Development, 27, 463, 10.1080/09638199.2017.1391322 Miles, 1979, The effects of devaluation on the trade balance and the balance of payments: Some new results, Journal of Political Economy, 87, 600, 10.1086/260780 Moosa, 2013, The U.S. Trade deficit as an, American Problem Transnational Corporations Review, 5, 12, 10.1080/19186444.2013.11658355 Mundell, 1963, Capital mobility and stabilization policy under fixed and flexible exchange rates, Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique, 29, 475, 10.2307/139336 Narayan, 2006, Examining the relationship between trade balance and exchange rate: The case of China’s trade with the USA, Applied Economics Letters, 13, 507, 10.1080/13504850500400488 Perron, 1992, Nonstationarity and level shifts with an application to purchasing power parity, Journal of Business & Economic Statistics, 10, 301 Pesaran, 1998, An autoregressive distributed-lag modelling approach to cointegration analysis, Econometric Society Monographs, 31, 371 Pesaran, 2001, Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16, 289, 10.1002/jae.616 Shrestha, 2018, Selecting appropriate methodological framework for time series data analysis, The Journal of Finance and Data Science, 4, 71, 10.1016/j.jfds.2017.11.001 Steinberg, 2019, On the source of U.S. trade deficits: Global saving glut or domestic saving drought?, Review of Economic Dynamics, 31, 200, 10.1016/j.red.2018.07.002 Tang, 2015, Real exchange rate and economic growth in China: A cointegrated VAR approach, China Economic Review, 34, 293, 10.1016/j.chieco.2014.12.002 Weixian, 1999, An empirical study of the foreign trade balance in China, Applied Economics Letters, 6, 485, 10.1080/135048599352781 Wexian, 1999, An empirical study of the foreign trade balance in China, Applied Economics Letters, 6, 485, 10.1080/135048599352781 Wu, 1998, An empirical investigation on the time-series behavior of the U.S.-China trade deficit, Journal of Asian Economics, 9, 467, 10.1016/S1049-0078(99)80098-0 Xing, 2012, Processing trade, exchange rates and China’s bilateral trade balances, Journal of Asian Economics, 23, 540, 10.1016/j.asieco.2012.06.001 Yu, 2018, China’s international trade development and opening-up policy design over the past four decades, China Economic Journal, 11, 301, 10.1080/17538963.2018.1516275 Yue, 2013, How much does China’s exchange rate affect the U.S. Trade deficit?, The Chinese Economy, 46, 80, 10.2753/CES1097-1475460605 Zhang, 2012, Will RMB appreciation reduce trade deficit in the US?, Journal of the Asia Pacific Economy, 17, 171, 10.1080/13547860.2012.640021 Zhang, 2013, How much does China’s exchange rate affect the U.S. Trade deficit?, The Chinese Economy, 46, 80, 10.2753/CES1097-1475460605 Zhang, 2007, What accounts for China’s trade balance dynamics?, Journal of Policy Modeling, 29, 821, 10.1016/j.jpolmod.2005.11.002 Zhou, 2014, What determines China’s trade balance dynamics: A disaggregate analysis of panel data AU - Gu, Xin, Journal of the Asia Pacific Economy, 19, 353, 10.1080/13547860.2014.880284