Investigating the Asymmetry in Trade Balance Response to Oil Price Changes: Evidence from China
Journal: Dumlupınar Üniversitesi Sosyal Bilimler Dergisi
Year: 2021

Examining the relation between oil price changes and the trade balance is important for oil-importing countries to formulate policy solutions. This study contributes to the literature by examining the asymmetric effects of changes in oil prices on the trade balance of China, the world’s largest crude oil importer. To this end, the Nonlinear Autoregressive Distributed Lag (NARDL) cointegration approach and Pesaran’s Generalized Variance Decompositions technique are adopted. The results reveal tha