The Impact of Real Oil Price on Real Exchange Rate in Oil Dependent Countries

Fatih Kaplan and Ali Rıza Aktaş ()
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Ali Rıza Aktaş: Alanya Alaaddin Keykubat University

Business and Economics Research Journal, 2016, vol. 7, issue 2, 103-113

Abstract: The paper aims to research the effects of real oil prices on real exchanges rates in oil dependent countries. Panel data for 1995-2014 of 5 oil dependent countries is taken into consideration for this purpose. The originality of the paper is its use of new approach with cross-sectional dependency and cross-country heterogeneity both taken into account. Panel data analysis suggest that, increase in the real oil prices has a positively effect on real exchange rates. Moreover, when countries are taken into account separately, increase in the real oil prices has no effect on USA and China, positively effects in Canada and Mexico, but negatively effects real exchange rates in Russia.

Keywords: Oil Price; Exchange Rate; Oil Dependent Countries; Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: C23 F31 F41 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:buecrj:0226

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