The Impact of Real Exchange Rate on Trade Balance between Vietnam and the United States in Nonlinear

Abstract

This paper aims to determine the existence of Marshall - Lerner condition and J cure for the trade balance of Vietnam and the United in linear and nonlinear models between Vietnam and the United States through the time from 2010:1 to 2017:12. The results support the existence of J curve in the linear model. Nonlinear model demonstrates the Marshall - Lerner condition. Wald test indicates the exchange rate has asymmetric in the short-run and the symmetric in the long run. These results indicate that policymakers can apply monetary policy of exchange rate policy to improve the trade balance.