Volume 18, Issue 2 (2018)                   QJER 2018, 18(2): 105-124 | Back to browse issues page

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Moayeri F, Zayanderoody M, Jalaee Esfandabadi S A, Mehrabi Boshrabadi H. The Effects of the Exchange Rate Overshooting On the Major Economic Activities in Iran. QJER. 2018; 18 (2) :105-124
URL: http://ecor.modares.ac.ir/article-18-14786-en.html
1- Ph.D. Student of Economics, Islamic Azad University, Kerman Branch , f.moayeri46@gmail.com
2- Assistant Professor of Economics, Islamic Azad University, Kerman Branch
3- Professor of Economics Shahid Bahonar University
4- Professor of Agricultural Economics Shahid Bahonar University
Abstract:   (7512 Views)
The exchange rate overshooting, which results from the monetary disruptions, has negative impact on production and investment in the main economic activities and de-stabilizes the whole economy because of their input-output linkages. Therefore, identifying the causes of economic instability can help to adopt appropriate policies and to create economic stability in the country. The main question is to what extent the exchange rate can cause instability in the economy. To answer this question, first, the exchange rate overshooting was calculated using the Hodrick- Prescott filtering method during 1989-2012. Then, it was introduced into the model by specifying the generalized Solow production function, and finally, the production function was estimated for the main activities of the economy using the panel data technique. The results show that the impact of the exchange rate overshooting on the major economic activities is negative.
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Article Type: Research Paper | Subject: Economics
Received: 2016/11/23 | Accepted: 2018/06/24 | Published: 2018/06/24

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