Estimating Equilibrium Exchange Rates for Major Oil Exporting Countries, 1970-2005 (in Persian)

Zeinab Hashempour ()
Additional contact information
Zeinab Hashempour: Iran

The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه), 2011, vol. 16, issue 3, 85-108

Abstract: The purpose of this paper is to study the main determinants of the bilateral real exchange rates for major oil exporting countries vis-à-vis the US dollar. Taking into account the impact of the real oil prices on real exchange rates, it may be observed that oil prices play a significant part in determining the terms of trade. In addition to the real oil price, two other fundamental factors that are purported to influence the behavior of the real exchange rate, namely, the productivity differentials and a term reflecting the demand-side bias were examined as well. Unbalanced panel data, covering the period within 1970-2005, were used for estimating the parameters of the model. Estimation result shows that elasticity of the real exchange rates with respect to oil prices are 0.13. It is observed that a rise in the real oil prices leads to an improvement in the terms of trade, and consequently lowers the real exchange rates, and causes a real appreciation of oil exporting countries’ currencies. Moreover, according to our estimations results, the existence of the Balassa-Samuelson effect is also confirmed in the economies of the oil exporting countries. Difference in exchange rate regimes was examined, too. Increases in government expenditure resulted in different behavior of real exchange rates in the oil exporting countries with different exchange rate regimes.

Keywords: Real Exchange Rate; Real Oil Price; Major Oil Exporting Countries; Panel Data (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
http://jpbud.ir/article-1-409-en.pdf (application/pdf)
http://jpbud.ir/article-1-409-en.html (text/html)
http://jpbud.ir/article-1-409-fa.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:auv:jipbud:v:16:y:2011:i:3:p:85-108

Access Statistics for this article

More articles in The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی و بودجه) from Institute for Management and Planning studies Contact information at EDIRC.
Bibliographic data for series maintained by Nahid Jebeli ( this e-mail address is bad, please contact ).