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J. Mon. Ec. 2014, 9(3): 85-118 Back to browse issues page
Determinants of the Choice of Exchange Rate Regimes in OIC Countries
Ali Fegheh Majidi
University of Kurdistan
Abstract:   (1061 Views)

Several political and economic factors are involved in choosing exchange rate policy in Organization of Islamic Cooperation (OIC) countries. In the present study, these factors
 have been investigated with an emphasis on OCA and political economic factors during 1990 -2014. The result shows that OCA and political economic factors as well as tradable sector are influential on exchange rate policy in OIC countries. In a way that oil revenue, financial development, GDP, openness of the economy, economic development and political instability all tend to increase the probability of pegging the exchange rate regimes, whereas an increasing industrial sector and size of the economy lead to a decrease in the probability of pegging the exchange rate regimes. Inflation, democracy, political system, legislative system, and monetary crises had no significant effect on the exchange rate regime. Also, the results show that the democracy and oil revenue had the highest impact on choosing exchange rate regime and financial development and
monetary crises risk had the least impact on choosing exchange rate regime.

JEL Classification: F31, C01

Keywords: Exchange rate regime, OIC, OCA theory, Political economy
Full-Text [PDF 557 kb]   (805 Downloads)    
Type of Study: Research | Subject: Monetary Economics
Received: 2015/02/16 | Accepted: 2016/10/22 | Published: 2016/10/22
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Fegheh Majidi A. Determinants of the Choice of Exchange Rate Regimes in OIC Countries . J. Mon. Ec.. 2014; 9 (3) :85-118
URL: http://jme.mbri.ac.ir/article-1-119-en.html


Volume 9, Issue 3 (Summer 2014) Back to browse issues page
Journal of Money and Economy Journal of Money And Economy
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