Abstract:
This paper defines the dependence of trading conditions on exchange rate fluctuations. The scope of the investigation included the analysis whether the relationship between trade and exchange rate is symmetric or asymmetric based on the theory of J-curve effect using quarterly data and ARDL methodology as a modeling tool. In addition, significant impact on trade creates trading partner’s income and income of home country, analysis of which also covered by this study. The obtained results show that the effect between exchange rate and trade is asymmetric, but, depending on other trading conditions, effect can be differ.
