This paper evaluates the current state of the literature concerning the effects of exchange rate movements on trade balance.Thus,\nthis paper is a review article and provides a survey of the alternative theories that focus on the effect of exchange rate changes\non the trade balance. It systemizes the literature into four distinct reviews and approaches following the chronological order.The\npaper presents the (a) Standard Theory of International Trade, (b) Elasticity Approach, (c) Keynesian Absorption Approach, and\n(d)Monetary Approach. The study shows that higher attention should be given for the most plausible dynamic theory in this field,\nknown as the J-Curve
Loading....