The J-Curve Revisited: REER, Economic Policy Uncertainty, and India’s Exports

Author(s)	Mr. Siddharth Nema, Dr. Bhawna Sahu
Country	India
Abstract	The paper examines India’s exchange rate–export relationship by introducing two overlooked factors: an export-weighted real effective exchange rate (REER) and economic policy uncertainty (EPU). Using monthly data from 2005–2024 and an ARDL-ECM framework, it analyses short- and long-run dynamics, accounting for structural breaks like COVID-19. Findings reveal strong export persistence and a J-curve effect—REER appreciation initially reduces exports but later boosts them, while long-run REER impact is insignificant. EPU shows alternating effects, with anticipatory export surges during uncertainty. Results challenge the view that currency depreciation alone drives exports, emphasizing structural reforms, input dependency reduction, and resilience to policy uncertainty.
Published In	Volume 8, Issue 1, January-February 2026
Published On	2026-01-18
DOI	https://doi.org/10.36948/ijfmr.2026.v08i01.66700

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International Journal For Multidisciplinary Research