Volume 17, Issue 1 (3-2022)
J. Mon. Ec. 2022, 17(1): 89-114 |
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Mohseni R, mahin ranjbar V. Exchange Rate Pass-Through on Non-Oil Trade Balance in Iran. J. Mon. Ec. 2022; 17 (1) :89-114
URL: http://jme.mbri.ac.ir/article-1-571-en.html
URL: http://jme.mbri.ac.ir/article-1-571-en.html
1- Assistant Professor, Member of Department of Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran
2- Department of Economics, Raja University, Qazvin, Iran
2- Department of Economics, Raja University, Qazvin, Iran
Abstract: (632 Views)
This article investigates the relationship between the exchange rate and non-oil trade balance in Iran between 1981 and 2014. A structural vector auto-regression model is built. The results indicated that the increasing effect of the real effective exchange rate worsens the non-oil trade balance in the short term. In contrast, the increasing effect of the real effective exchange rate improves the non-oil trade balance in the long term. In addition, the increase in the effective real exchange rate has two effects: the price effect can overcome the quantity effect leading to the deterioration of the non-oil trade balance in the short term. However, the quantity effect overcame the price effect and improved the non-oil trade balance in the long term. On the other hand, the J-curve and S-curve phenomena were confirmed.
Keywords: Real effective exchange rate, non-oil trade balance, structural vector auto-regression (SVAR) method, J curve, S curve.
Type of Study: Original Research - Empirical |
Subject:
Macroeconomics
Received: 22 Jan 2022 | Accepted: 11 Apr 2022 | Published: 4 Oct 2022
Received: 22 Jan 2022 | Accepted: 11 Apr 2022 | Published: 4 Oct 2022
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