Real Exchange Rate Misalignment in Azerbaijan

Fakhri Hasanov and Fariz Huseynov

MPRA Paper from University Library of Munich, Germany

Abstract: By using quarterly data from 2001-2007 and applying various approaches, we estimate real equilibrium exchange rate misalignment for Azerbaijani Manat (AZN) and find that AZN is slightly overvalued. Purchasing power parity approach does not explain the equilibrium exchange rate. However using behavioral and permanent equilibrium exchange rate approaches, we find that the relative productivity, terms of trade, trade openness, net foreign assets, government expenditures and oil prices are the main determinants of misalignment.

Keywords: Real exchange rate; Misalignment; Azerbaijan; Manat (search for similar items in EconPapers)
JEL-codes: C22 F31 O24 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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