J-curve Phenomenon Research Articles

Depreciation and Trade Balance: An Exploration of the J-Curve Phenomenon in Indonesia

Research Originality: Global economic uncertainty has increased in recent years, leading to an appreciation of the US dollar relative to most global currencies, including the Indonesian rupiah. The novelty of this study is the inclusion of natural resource commodity price index variables, given the importance of these commodities in Indonesia's balance of trade.Research Objectives: This study aims to examine the effect of rupiah exchange rate depreciation on Indonesia's trade balance.Research Methods: This study uses a Vector Error Correction Model (VECM) to analyze Indonesia's balance of trade from January 2015 to December 2023, examining the potential J-Curve phenomenon resulting from the depreciation of the Indonesian rupiah.Empirical Result: Findings from the impulse response analysis suggest that the J-Curve phenomenon is present in Indonesia's balance of trade as a result of the rupiah's depreciation. The results of this study also confirm the positive effect of increasing natural resource commodity prices on Indonesia's trade balance.Implications: The implication of these findings is that exchange rate depreciation can improve Indonesia's trade balance only when natural resource commodity prices are rising. Conversely, if commodity prices decline, maintaining the stability of the rupiah exchange rate becomes crucial.JEL Classification: F11, F14, F31, Q02

Bilateral J-Curve Between Türkiye and Its Major Non-EU Trading Partners: Evidence from Both Linear and Non-Linear Approach

This research analysed the bilateral J-curve phenomenon in the Turkish economy. For this purpose, we applied both the linear and non-linear Autoregressive Distributed Lag (NARDL) co-integration methods, in addition to the asymmetric Toda-Yamamoto causality test, to examine whether the impact of Turkish lira appreciations differs from that of lira depreciation. The findings from the linear model indicate statistically significant coefficients for the long term, and J-curve effects were observed in the case of two countries: Russia and the UAE. This suggests that when the Turkish lira depreciates, it positively affects Turkey's trade balance with these partners; however, lira appreciations have a negative impact. In contrast, the non-linear model provides more evidence, with the results revealing that asymmetry cannot be ignored, as the positive and negative variables exhibit differences in signs, magnitudes, and levels of significance. We found the J-curve effect for only three countries (India, USA, and UAE) out of seven partners in this model. Third, the lira evaluation between the short and long run affected the external balance. Furthermore, the long-run error correction mechanisms converge to steady-state equilibrium faster. Lastly, there is a unidirectional or bilateral linkage between the FX rate and the external deficit for these four partners. Therefore, exchange rate policies are a determinant that should be considered in relationships with certain trading partners.

Analysis of Trade Effects of Parallel Exchange Rate in Nigeria

Aims: The study examines the potency of parallel exchange rates in the movement of international trade in Nigeria. The monetary authorities have embarked on various exchange rate regimes basically because the supply of foreign exchange is not enough to meet the demand. Consequently, a parallel market for exchange rates exists and has become a strong and functional market in the country. But the reason for managing foreign exchange and by extension, introducing various exchange rate regimes was to correct the balance of trade disequilibrium. Yet the balance of trade deteriorates, particularly that of non-oil trade balance. Does the parallel exchange rate contribute to this or does it ameliorate it? Study Design: Descriptive, Correlation, and Regression analysis on time series data. Place and Duration of Study: Sample: Monthly data from January 2007 to December 2022 (2007:1-2022:12) were extracted from the online data repository of the Central Bank of Nigeria. Methodology: The autoregressive distributed lag technique was employed on monthly data between January 2007 and December 2022 (2007:1-2022:12). Results: The result indicates that the short-run dynamics of total exports (total imports) are negatively (positively) and significantly affected by parallel exchange rate. Generally, depreciation of the parallel exchange rate is detrimental to export particularly non-oil exports. Further, depreciation of parallel exchange rate encourages imports and highly persistent in influencing non-oil imports. The J-curve phenomenon breaks down for total balance of trade. However, the J-curve phenomenon cannot be confirmed in the case of oil trade balance because there is no information about the long run effect of parallel exchange rate on oil export due to the non-integration of the model. In the case of non-oil trade balance, the short-run outcome confirms the existence of the J-curve prediction. Conclusion: Following these results, it is recommended among others that government should activate a single market (window) for foreign exchange. Also, the authorities should ensure that importation of non-oil products such as exotic cars by government officials be stemmed.

Is There J-Curve Phenomenon and Asymmetric Effects of Exchange Rate on Trade Balance in East Java?

This study aims to analyze the effect of exchange rate asymmetry on the trade balance between East Java Province and the largest trading partner countries (China, Japan, and the United States) in the short-run and long-run and to detect the J-Curve phenomenon. This study uses the Nonlinear Autoregressive Distributed-Lag (NARDL) method with 2010Q1 - 2023Q1 time-series data. The results of the study show that in the short-run, both the appreciation (NEG) and depreciation (POS) of the exchange rate have no effect on East Java's trade balance in all models. However, in the long-run, exchange rate appreciation and depreciation have a significant negative effect on East Java's trade balance across all models. Based on the estimation results, it can be concluded that there is no J-Curve phenomenon in East Java's trade balance with trading partner countries. Because in the asymmetry model, the J-Curve phenomenon can occur if depreciation or appreciation has a significant positive effect and is cointegrated in the long-run, regardless of the short-run coefficient being positive or negative and significant or not significant. From these conditions, it can be concluded that the trade industry in East Java is called inelastic. That is, price changes do not affect demand for export and import volumes. Therefore, the policy of depreciating the Rupiah exchange rate is not the best strategy to be implemented as an export promotion for East Java because only a few sectors benefit.

ASYMMETRIC EFFECTS OF EXCHANGE RATES ON MALAYSIAN PALM OIL EXPORTS TO CHINA

Fluctuations in exchange rates can induce uncertainty, significantly impacting on a country's exports. The unexpected appreciation or depreciation of a currency can also influence the flow of palm oil exports between Malaysia and China, as it affects the relative prices. The purpose of this study is to investigate whether the effects of exchange rate fluctuations on palm oil exports exhibit symmetric or asymmetric relationship. Additionally, this study endeavors to ascertain the presence of the J-curve phenomenon in explaining the connection between exchange rates and Malaysia's palm oil exports to China. This study employs a quarterly dataset spanning from January 2010 to June 2023 and utilizes the linear and non-linear Autoregressive Distributed Lag approaches. The study's results affirm the presence of asymmetric effects stemming from exchange rate movements on Malaysia's palm oil exports to China. This study found that ringgit depreciation has a positives impact on palm oil exports in the long run. These empirical findings hold significance for policymakers, shedding light on the positive repercussions of palm oil price changes on economic activity, ensuring that all stakeholders in the sector reap the benefits accordingly.

The exchange rate, income, trade openness and the trade balance: longitudinal panel analysis for selected SSA countries

Purpose Motivated by recent rapid exchange rate depreciations, shrank economic growth, high inflation, and persistent trade deficits, this study examines the trade balance (TB) in the face of the recent dynamics of the stated macroeconomic factors, which are also important determinants of the TB. The symmetric test of the J-curve phenomenon for the selected Sub-Saharan African (SSA) countries is revisited in this regard. The study uses panel data from 1970 to 2020 for ten of these countries for the longitudinal panel analysis with the TB as the dependent variable and the real exchange rate, foreign and domestic national incomes, and trade openness as the set of independent variables.Design/methodology/approach Because the underlying data set involves a heterogeneous panel of relatively short N and long T, the pooled mean group (PMG) and mean group (MG) heterogeneous panel models are employed based on the Hausman test for parameter consistency in heterogeneous panels.Findings The findings largely support the domestic income growth– TB worsening and the foreign income growth– TB improvement hypotheses. Trade openness is found to mostly augment the TB performance of the countries. The results also validated the J-curve effect for only 3/10 and 2/10 countries in the PMG and MG models, respectively. The divergence for most of the countries is attributed to possible import compression and institutional structure of SSA countries.Practical implications Given the favorable effects of trade openness on the TB performance of SSA countries, it is recommended that SSA countries place much emphasis on import-substitution industrialization and value addition to their natural resources as well as investment-driven growth policies to improve the competitiveness of their exports and reverse the chronic deficits in their TBs.Originality/value This paper is unique for invoking heterogeneous panel models to analyze the TB in light of recent dynamics of its determinants, as well as providing an update on the symmetric test of the J-curve phenomenon for the selected SSA countries.

Revisiting the Twin Deficit Hypothesis in presence of exchange rate nonlinearities: evidence from India using nonlinear ARDL model

PurposeThis paper is an attempt to re-examine the validity of the Twin Deficit Hypothesis in the Indian economy, which is characterised by mounting inequality and liquidity constraints. The authors augment the econometric analysis with two important mediating variables, exchange rate and trade openness, to analyse their impact on current account deficit.Design/methodology/approachThe authors have used a ground-breaking asymmetric cointegration technique proposed by Shin et al. (2014) to investigate the short-run and long-run asymmetric nexus between gross fiscal deficit and current account deficit. In addition, the study has used asymmetric dynamic multipliers to see the dynamics of nonlinear adjustment from disequilibrium in the short run to equilibrium in the long run. The study has also used generalised impulse response functions to check the robustness of our cointegration results.FindingsUsing annual time series data from 1970 to 2018, the empirical exercise validates the presence of asymmetries in the Twin Deficit Hypothesis for the Indian economy. This study's robust findings demonstrate that the two deficits are asymmetrically related in the long run. The authors also found that exchange rate asymmetrically affects current account deficit thus validating the asymmetric J-curve phenomenon. From the causality analysis, the authors infer that there is a weak unidirectional causality running from fiscal deficit to current account deficit.Research limitations/implicationsFiscal deficit may cause current account deficit via changes in other macroeconomic variables that were not taken care of in this study. Therefore, the estimation techniques used in the present study might suffer from the issue of omitted-variable bias. Further research should include other macroeconomic variables where the twin deficit nexus is also influenced by other relevant variables. This will help in disentangling the indirect transmissions by which fiscal deficit translates into current account deficit.Practical implicationsThe results from our econometric exercise strongly suggest that the twin deficits are asymmetrically related. From a policy perspective, the asymmetric twin deficit nexus offers strong policy implications for the development of policies that are flexible enough to respond to shifts in internal and external sector dynamics. While framing the mechanism of fiscal prudence, policymakers in emerging countries like India must take into account the regime-changing behaviour of twin deficits.Originality/valueThe present paper is a significant contribution to the existing body of literature by being the first study in India which has analysed the Twin Deficits phenomenon in a nonlinear framework with the incorporation of asymmetric exchange rate dynamics in the model.

Exchange Rate Changes and the J-curve Effect: Asymmetric Evidence from a Panel of Five Emerging Market Economies

Using the symmetric and asymmetric specifications of the pooled mean group estimator, we attempted to scrutinise the possibility of the J-curve effect in the case of Brazil, Russia, India, China and South Africa. In addition to both real effective exchange rate changes and nominal effective exchange rate changes, the possible impact of domestic and foreign demand pressures on the trade balance is also estimated. Incorporating a quarterly data set spanning from 2000Q1 to 2020Q2, the results based on the symmetric and asymmetric model establish no evidence of the J-curve phenomenon. However, when asymmetric possibilities are considered, appreciation is found to deteriorate the trade balance relatively by a greater magnitude whereas the impact of currency depreciation is insignificant. In addition, no asymmetric evidence has been reported concerning the effect of domestic and foreign demand. However, a hike in the former deteriorated the trade balance whereas an increase in the latter improved it in both linear and non-linear frameworks. JEL Codes: F4, F41, F42

PS-P15-2: CHANGES IN HOME BLOOD PRESSURE VARIABILITY DURING DOWN-TITRATION OF ANTIHYPERTENSIVE DRUGS IN PATIENT WITH SYSTOLIC HOME BLOOD PRESSURE BELOW 120MMHG

Background: In the guideline recommendation for intensive blood pressure (BP) control, there has been a concern for the J-curve phenomenon so European guidelines recommended down-titration if systolic BP (SBP) lowered below 120 mmHg. But there is no studies for the changes in BP and BP variability with down-titration. Aim of the study is to test the hypothesis that BP variability could be increased with down-titration. Methods: In a retrospective study, 82 patients undergone down-titration in whom home BP monitoring (HBPM) before and after were available were analyzed during 2020.09.01∼2022.05.31. During this period, the guideline directed medical therapy was to down-titrate when home SBP was below 120 mmHg. When preclinic SBP below 120 mmHg, down-titration was performed when home SBP was less than 120 mmHg in the next visit or incidental home SBP less than 120 mmHg regardless of clinic SBP level. Minimal and maximal required numbers of readings in HBPM were 8 and 40. Average and standard deviation (SD) were compared before after down-titration. Results: Mean age was 66.2(34∼95) years and female readings were 44 (53.7%). Preclinic SBP was 122.4 + /-17.5 mmHg and clinic SBP was 121.9 +/-14.2 mmHg at baseline (BL). Clinic SBP at follow up (FU) was 126.4 +/-15.5 mmHg. History of cardiovascular diseases, diabetes and hyperlipidemia were present in 17%, 32.9%, and 69.5%, respectively. Numbers of AHMS were 1 in 26.8%, 2 in 30.5%, 3 in 32.9%, and 4 in 9.7%. The uses of renin angiotensin blockade, beta blocker, calcium antagonist, and diuretics were 84.1%, 36.5%, 75.6% and 29.3%, respectively. Home SBP was increased significantly (111.6 mmHg BL, 118.8mmHg FU, p < 0.0001). SD of home SBP did not increased significantly (3.5 mmHg BL, 3.4 mmHg FU, p = 0.85). Home diastolic BP (DBP) was also increased significantly (68.7 mmHg BL, 72.8 mmHg FU, p < 0.0001). SD of home DBP did not changed (2.2 mmHg BL, 1.6 mmHg, p = 0.55). Conclusion: When antihypertensive drug was down-titrated due to excessive lowering of systolic BP less than 120 mmHg, mean BPs were increased modestly without increase in BP variability. Current guideline directed down-titration should be safe without increasing BP variability.

Modelling J-Curve by Using Differential Equations: Studies in Finances and Entrepreneurship

In this paper, a mathematical formalism for defining the J-Curve phenomenon is set up in the form of a corresponding differential equation with practical application. An explicit form of the differential equation to describe the J-Curve, as well as the solution of the differential equations in terms of polynomials with coefficients satisfying a particular property was presented for the first time. The J-Curve and S-Curve are modelled as Riccati's nonlinear differential equation of the 1^st order. A mathematical form of the differential equation is proposed that corresponds in structure to the Laguerre Polynomials (linear differential equation of the 2^nd order), resulting in J-Curve as a solution. To confirm this, it is necessary to fulfil two main criteria for the mathematical validation of the J-Curve - confirmation of the structure of Laguerre polynomials (a polynomial equation with coefficients of alternating sign) and an R-squared score greater than 0.6. Two case studies are presented to validate the theoretical concepts and demonstrate the application of J-Curve mathematical modelling - Returns on Venture Investments (where returns from start-up investments are analysed over a 12-year period) and Returns on Long-Term Stock Investments (based on actual financial data for the period from 2016 to 2020 for the NIFTY 500 Index of the National Stock Exchange of India). A direct connection between the mathematical formulation and the graphs obtained is shown, which corresponds to the mathematical validation of the J-Curve phenomenon. It is mathematically shown how the financial data manifest the J-Curve behaviour, satisfying the initial assumptions of such a model. The mathematical model set up in this way can be verified in practice on different other types of data, which could create interest in an interdisciplinary approach in such research. This could include studies particularly from other economic fields such as micro- or macroeconomics.

China’s trade in services and asymmetric J-curve

Almost all studies that tested the J-curve phenomenon, used trade data in only goods. Trade in service has received no attention until recently when one study tested the symmetric and asymmetric J-curve hypothesis using financial and insurance service data between the U.S. and its major partners. In this paper we add to this new literature by testing the symmetric and asymmetric J-curve effect using China’s service trade with rest of the world. We find support for the J-curve effect in six out of 12 service industries, symmetric in some and asymmetric in some others.

TÜRKİYE VE AVRO BÖLGESİ ARASINDAKİ İKİLİ TİCARETTE J EĞRİSİ

A large body of the literature use aggregate data to investigate the validity of the J-curve hypothesis. Recent studies, however, address to the importance of disaggregated data in order to prevent from aggregation bias. In the case of Turkey where foreign trade volume is largely dominated by the Eurozone countries, one set of studies examines the J-curve phenomenon using total trade data while a second set of studies investigates the validity of the bilateral J-curve within a time-series framework. This study intends to investigate the validity of the bilateral J-curve between Turkey and the Eurozone over the period 2002:Q1-2019:Q4 within a dynamic panel data framework robust to heterogeneity and cross-section dependence. Results obtained from the Dynamic Common Correlated Effects estimator reveal that the J-Curve hypothesis does not hold given the short-run results.

The J-curve phenomenon in Afghanistan and its major trading partners: evidence from a non-linear ARDL approach

The J-curve phenomenon in Afghanistan and its major trading partners: evidence from a non-linear ARDL approach

REAL WORLD IMPACT OF BLOOD PRESSURE CHANGES ON MORBIDITY AND MORTALITY IN TYPE 2 DIABETES

Objective: To assess the impact of BP changes on the risk of cardiovascular events and mortality in type 2 diabetes. Design and method: The sample was selected using the HER of the Valencian Community. Type 2 diabetics were selected through ICD codes and retrospectively evaluated from January 2012 to December 2016. To evaluate BP changes, the follow-up time was divided in six-month blocks and the average of BP for each interval was considered. SBP was categorized: < 120 mmHg; 120–129 mmHg (reference); 130–139 mmHg; 140–149 mmHg; > 150 mmHg. To evaluate the influence of DBP, the population was stratified according to categories of average DBP: < 60 mmHg; 60–69 mmHg; 70–79 mmHg; > 80 mmHg. Information about cardiovascular events, including Stroke and Acute Coronary Syndrome (ACS) was extracted from the ICD codes. Total mortality was determined by matching records and death certificates. Time-varying Cox regression for SBP stratified by DBP categories was used to assess the risk associated with changes of SBP. The models were adjusted by age, sex, HBA1c, KDIGO, previous cardiovascular events and use of cardiovascular drugs. Results: 156 363 type 2 diabetics patients were included (mean age 69.5(11.5), 48.7% females, mean glycated Hb 7.05 (1.35%) 21% in secondary prevention, 21.4% under insulin treatment). The average number of BP measurements was 14. During an average follow-up of 4.18 y, there were 13399 deaths, 15100 strokes and 6295 ACS. In the fully adjusted time-varying Cox regression, having a SBP< 120 mmHg was a significant risk factor for death across all categories of DBP, whereas SBP> 130 mmHg conferred protection. For the case of ACS and stroke, a J-curve phenomenon was observed with significantly higher risk for those with SBP> 150 mmHg or < 120 mmHg across categories with DBP> 60 mmHg. This J-curve phenomenon was also observed graphically using restricted cubic splines (Figure). Conclusions: Although difficult to achieve in clinical practice, lower boundaries for BP goals in diabetics have to be taking into account.

Exchange Rate and Trade Balance in Nigeria: Testing for the Validity of J-Curve Phenomenon and Marshall-Lerner Condition

This study examined the validity of the J-Curve Phenomenon and Marshall-Lerner Condition in the Nigerian context using data from 1982-2020. The Autoregressive Distributed Lag Bounds test method of cointegration was employed for the analysis of short-run and long-run effects of exchange rate uncertainty on the trade balance. The long-run result endorsed the validity of the Marshall-Lerner Condition in Nigeria. Thus, a depreciation of the Naira improves the trade balance in the long run. However, the results of the short-run dynamics revealed that there is no J-Curve phenomenon in Nigeria. The study recommends diversification of exports to improve the performance of Nigeria’s non-oil exports. In addition, fiscal, monetary and exchange rate policies should be properly harmonized to tackle trade deficits. Furthermore, there should be more investment in Research and Development in Nigeria to improve the value of goods exported and the competitiveness of its exports in the arena of international trade.

Analisis fenomena Kurva J di Indonesia

The free-floating exchange rate system in Indonesia has consequences for fluctuations in the Rupiah exchange rate. In accordance with the J-Curve theory, will the weakening of the Rupiah value have an impact on improving the trade balance in the long term or will it worsen the trade balance condition in the long term. This study will examine how the influence of the Rupiah exchange rate on the trade balance in both the short and long term and whether the J-Curve phenomenon occurs in Indonesia using the Vector Error Correction Model (VECM) analysis technique in the observation period 2015.1-2020.12. The results of this study prove that the J-Curve phenomenon occurs in the Indonesian economy. The findings show that the depreciation of the Rupiah in the short term will cause a trade balance deficit, but in the long term, the depreciation of the Rupiah will cause a trade balance surplus. The results of the variance decomposition show that the exchange rate has a major role in the formation of fluctuations in the trade balance. In addition, shocks that occur in the exchange rate will be responded to by movements in the trade balance position and permanent, namely for the next ten periods. The limitation of this research is that the identification of the existence of the J curve phenomenon is generally carried out on the entire trade balance. Further research is expected to identify the J curve phenomenon specifically in several trading partner countries of Indonesia.

Importance of Vascular Function in Patients with Heart Failure with Preserved Ejection Fraction

There had been no effective cardioprotective medications for heart failure with preserved ejection fraction (HFpEF). Therefore, treatment intervention at the hypertension (HT) stage (stage A), which is a major factor in HFpEF, is necessary. In fact, the SPRINT and STEP trials reported that strict and intensive blood pressure (BP) control was useful, reducing approximately 25% of the primary endpoints, including cardiovascular events. The effectiveness of BP reduction for HFpEF after the onset of HF (stage C or D) has been reported and shown to generally follow the J-curve phenomenon. Both left ventricular systolic/diastolic dysfunction and vascular failure are related with the pathophysiology of HF. In the case of coexisting vascular failure, BP lowering treatment is effective, because it decreases the afterload. However, BP lowering treatment has been reported to increase the incidence of renal dysfunction; therefore, paying attention to the degree of association with vascular failure, and multiple organs when determining the target BP are important to consider. The decision on the target BP and the optimal choice of cardioprotective/antihypertensive medications for HF should be based on the pathologic condition.

Asymmetric J-curve: evidence from UK-German commodity trade

Previous studies that have investigated the J-curve phenomenon between the UK and its largest trading partner from the European Union (EU), Germany, used aggregate bilateral trade data and found no support for the phenomenon. In this paper, we disaggregate the trade data by industry and investigate the symmetric as well as asymmetric J-curve hypothesis for each of the 95 2-digit industries that trade between the two countries. We found support for the symmetric J-curve effect in 12 industries, but support for the asymmetric J-curve effect 21 industries. Since the asymmetric approach required separating pound depreciation from appreciation, the approach also allowed us to identify industries that could benefit or be hurt from pound depreciation and those that could be hurt or benefit from pound appreciation.

Is There a J-Curve Effect in Sierra Leone? An Empirical Analysis with VECM

This paper examines the relationship between exchange rate and trade balance in determining whether the J-Curve phenomenon holds in the short and long-run for Sierra Leone during the period 2002Q2-2019Q4. The econometric technique commenced with an assessment of unit root to ascertain the order of Unit Root and followed by an Unrestricted Vector Autoregressive (VAR) estimation. The procedure leading to using Vector Error Correction Model (VECM) was confirmed through Johansen Cointegration test. The result suggests long-run relationship running between exchange rate and trade balance for all three model equations, but weakly for the Trade Balance Model, which is also attested in the impulse response shock for trade balance and real effective exchange rate. The Marshall-Lerner (ML) condition was also satisfied, with the joint elasticity for Export and Import summing up to more than one. The short-run dynamic situation for Sierra Leone was not satisfied with the Wald Tests for all three models—this could be due to internal macroeconomic bottlenecks associated with weaknesses in the real sector. The findings for this study are relevant for Central Bank policy formulation and fiscal consolidation efforts. It is highly recommended that domestic production is boosted to ascertain macroeconomic stability in the economy.

AN EMPIRICAL EVIDENCE ON THE IMPACT OF REAL EFFECTIVE EXCHANGE RATE ON TRADE BALANCE

This study aimed to examine whether the real effective exchange rate has an impact on trade balance in short run and long run, as well as to investigate if the Marshall-Lerner condition and J-curve phenomenon is satisfied by the variables in Malaysia from 2010 until 2019. Monthly data was used where the dependent variable was trade balance and the independent variable was real effective exchange rate. Several econometric models are applied including the Johansen co-integration to investigate long run relationship and Marshall-Lerner condition estimation, VECM model to investigate short run relationship estimation and impulse response test for J-curve phenomenon estimation. The findings revealed that there was long run relationship between the variables and there was existence of Marshall-Lerner condition. Meanwhile, there was no short run relationship between the variables and J-curve phenomenon was not satisfied in this study. This could be due to devaluation of real effective exchange rate where will help to improve the trade balance in the long run but give a negative effect in the short run which not followed the J-curve pattern. Hence, the Malaysia government should take high concern of exchange rate policy as well as monetary and fiscal policy in order to help stimulate the exports and reduce the inflationary pressure due to devaluation of exchange rate.