01762cas a2200241 a 4500 AALejournalIMF008571 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451848717 1018-5941 BD-DhAAL BD-DhAAL Stucka, Tihomir. The Effects of Exchange Rate Change on the Trade Balance in Croatia / Tihomir Stucka. Washington, D.C. : International Monetary Fund, 2004. 1 online resource (30 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students A reduced-form model approach was used to estimate the trade balance response to permanent domestic currency depreciation. For this purpose, long-run and short-run effects were estimated, using three modeling methods along with two real effective exchange rate measures. On average, a 1 percent permanent depreciation improves the equilibrium trade balance by between 0.94 percent and 1.3 percent. The new equilibrium is established after approximately 2.5 years. Evidence of the J-curve is also found. Overall, in the light of the results obtained, it is questionable whether permanent depreciation is desirable to improve the trade balance, taking into account potential adverse effects on the rest of the economy. Mode of access: Internet IMF Working Papers; Working Paper ; No. 2004/065 Full text available on IMF http://elibrary.imf.org/view/journals/001/2004/065/001.2004.issue-065-en.xml IMF e-Library