To empirically assess the Marshall Lerner condition, our study examined bilateral trade data of Pakistan's export and import with ten key trading partners in terms of the disaggregated model. Prior studies used the aggregated model to evaluate the Marshall Lerner condition, however the aggregated model frequently produces mixed results due to aggregation bias. The Marshall-Lerner condition only holds in a disaggregated method for seven countries: Japan, China, Kuwait, Germany, the United States, Saudi Arabia, and Italy. Except for the UK, France, and Turkey, the competitive real effective exchange rate or depreciated value of Pakistan currency (PKR) improved the bilateral trade balance on average with mentioned trading partners. Additionally, the PKR devaluation alone will not improve the bilateral trade deficit with three European nations, including France, the UK, and Turkey. To maintain a favourable bilateral trade balance with these European countries, the authorities should implement supply-side and preventative measures.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Submission of work requires that the piece to be reviewed has not been previously published. Upon acceptance, the Author assigns to the Bulletin of Business and Economics (BBE) the right to publish and distribute the manuscript in part or in its entirety. The Author's name will always be included with the publication of the manuscript.
The Author has the following nonexclusive rights: (1) to use the manuscript in the Author's teaching activities; (2) to publish the manuscript, or permit its publication, as part of any book the Author may write; (3) to include the manuscript in the Author's own personal or departmental (but not institutional) database or on-line site; and (4) to license reprints of the manuscript to third persons for educational photocopying. The Author also agrees to properly credit the Bulletin of Business and Economics (BBE) as the original place of publication.
The Author hereby grants the Bulletin of Business and Economics (BBE) full and exclusive rights to the manuscript, all revisions, and the full copyright. Bulletin of Business and Economics (BBE) rights include but are not limited to the following:
(1) to reproduce, publish, sell, and distribute copies of the manuscript, selections of the manuscript, and translations and other derivative works based upon the manuscript, in print, audio-visual, electronic, or by any and all media now or hereafter known or devised; (2) to license reprints of the manuscript to third persons for educational photocopying; (3) to license others to create abstracts of the manuscript and to index the manuscript; (4) to license secondary publishers to reproduce the manuscript in print, microform, or any computer-readable form, including electronic on-line databases; and (5) to license the manuscript for document delivery. These exclusive rights run the full term of the copyright, and all renewals and extensions thereof.