RESUMEN
The food industry has been greatly impacted by COVID-19, causing governments to restrict food exports to prevent shortages. A negative food trade balance reveals a country's dependence on imports and underscores the significance of a sound food policy. Hence, for the first time, this study examines the J-curve hypothesis for the U.S. with Canada at the state rather than country level and creates maps based on the findings. The approach of this study differs from all empirical studies using country-level J-curve analyses, because the U.S. may require a state level analysis since its states differ in terms of economic-population sizes, tax rates, and administrative structures. For this aim, this study employs the linear and nonlinear autoregressive distributed lag (ARDL) approaches. The results indicate that while only 8 out of 47 U.S. states support the food-based asymmetric J-curve hypothesis, 15 U.S. states support the asymmetric inverse J-curve hypothesis. Additionally, 9 U.S. states support the food-based symmetric J-curve hypothesis, and 2 U.S. states support the symmetric inverse J-curve hypothesis. Based on these results, policymakers of U.S. states where the J-curve hypothesis is not supported should review their food-based bilateral trade policies with Canada. Graphical abstract: These maps depict the U.S. states in green and red, indicating support for the J-curve and inverse J-curve hypotheses, respectively. The map on the left was generated using the linear model (symmetric approach), while the map on the right was generated using the nonlinear model (asymmetric approach). Supplementary Information: The online version contains supplementary material available at 10.1007/s00003-023-01436-x.
RESUMEN
This study creates a US state-level asymmetric Jcurve hypothesis testing map with Canada. The map may visually present how a US state policymaker manages bilateral trade balances with Canada. Green-colored US states support the evidence of the asymmetric Jcurve hypothesis, while red-colored and gray-colored states do not. The main empirical finding indicates that the asymmetric Jcurve hypothesis is supported for only 15 US states and D.C., shown in green on the map. This suggests that policymakers of these US states may have more sustainable and manageable bilateral trade policies with Canada. If so, policymakers in red/grey US states should reevaluate their bilateral trade policy regulations, especially those related to taxation, budgetary frameworks, energy prices, and other relevant factors that can impact consumer-producer prices and thereby create competitive state-level real exchange rates. By doing so, they may achieve the anticipated positive outcomes of the Jcurve effect to export more.
RESUMEN
This study investigates the impacts of pandemic-induced economic policy uncertainties (PIEPU) on the S&P500, Nasdaq-100, and Dow Jones indexes (stock returns). To this aim, for the first time, newly created IDEMV (the Infectious Disease Equity Market Volatility index (henceforth, PIEPU index) is used. The Autoregressive Distributed Lag (ARDL) model and the Toda and Yamamoto (Journal of Econometrics, 1995, 66, pp. 225-250) causality test are applied for the 2009-2020 period. Empirical findings indicate that rises in the PIEPU index lead to falls of only the S&P500 and Dow Jones indexes. Corporations in the tech-heavy Nasdaq100 index do not negatively respond to rises in the PIEPU index. Additionally, the negative impacts of the rises in the specifically COVID-19 based-constructed PIEPU (DCOVPIEPU) index on the S&P500 and Dow Jones indexes are higher than the negative impacts of the general PIEPU index. This can be interpreted to mean that the larger the magnitude and spread rate of a pandemic, the larger the negative impacts on stock returns. In the sample period of this study, COVID-19 is the largest and most destructive pandemic compared to H1N1 and Ebola.