Showing 3 results for Real Effective Exchange Rate
Mohammad Reza Lotfalipour, Bahareh Bazargan,
Volume 16, Issue 1 (5-2016)
Abstract
Trade balance is regarded as both main macroeconomic factor and strategic constraint in developing countries. Exchange rate, which is defined as parity relationship between national currency and foreign currencies, is a vital determinant of countries’ trade balance. As the real effective exchange rate measures the changes in prices and relative costs by a common currency, it is the most popular indicator to measure competitiveness.
On one hand, fluctuation of this index represents disequilibrium in the economy, and on the other hand, it is the cause of more instability. Since the direction and size of the effects of real exchange rate on trade balance is an important macroeconomic issue, this articleinvestigates the real effective exchange rate changes on trade balance in Iran and its’ major partners using the Vector Error Correction Model ( VECM ) over the period 1993-2011. The results indicate that the real effective exchange rate volatility reduces trade balance only for Germany in the short run and rises it for Italy in the long run.
Mohammad Naghibi, Peyman Vahedi,
Volume 18, Issue 2 (7-2018)
Abstract
The real effective exchange rate and its uncertainty are among the most important macroeconomic variables that affect different economic sectors from various aspects. Since the changes in exchange rate have no identical impacts on all sectors of the economy and regarding considerable importance of industrial development on economic development, this study examines and evaluates the effects of real effective of exchange rate and its uncertainty on the value-added of industrial subsectors based on the two-digit codes ISIC-REV4 using Panel data and Engel-Granger methods during 1979-2014. The results show that the real effective exchange rate is of different effects on various subsectors of the industry while its uncertainty has no effect on sub-sectors’ value-added. Consequently, there is no single exchange rate policy in industrial sector due to different foreign exchange requirements in its subsectors.
Dr Reza Ranjpour, Dr Mohammad Reza Salmani, Dr Zahra Karimi Tekanloo, Dr Nosrat Mokhtarzadeh Khaneghahi,
Volume 19, Issue 1 (4-2019)
Abstract
The exchange rate as an important macroeconomic variable affects various economic sectors from different aspects. This study aims to determine the effects of exchange rate shocks on the performance of economic sectors of East Azerbaijan Province. To this end, first exchange rate shock is calculated using a non-linear Markov-Switching (MS) model and is included as an explanatory variable in the final model. To estimate the nonlinear model based on the maximum likelihood function, a MS model with two regimes and a pause, i.e., MSIH (2)-AR (1), is selected. Then, a panel data model with varying coefficients is estimated by pooled mean group estimator (PMGE). The model is used to analyze the effect of uncertainty in real effective exchange rate on value-added of 15 economic sectors of East Azerbaijan Province over the period 2000-2013. The results indicate positive and significant effects of capital, labor and the exports on value-added of economic sectors. Among the 15 districts of the province, exchange rate volatility has a negative and significant influence on value-added and production of 4 out of 15 sectors. The results call for paying more attention to exchange rate volatility and adopt effective policies to remove its adverse effects.
