:: Volume 12, Issue 2 (Spring 2017) ::
J. Mon. Ec. 2017, 12(2): 145-173 Back to browse issues page
Investigating the Effect of Monetary Treaty on Trade between Iran and Major Trading Partners
Minoo Kiani-Rad 1, Reza Tehrani2, Akbar Komijani2, Mohammad Javad Iravani2
1- University of Tehran, Alborz Campus
2- University of Tehran
Abstract:   (1326 Views)
In the present study, the effect of concluding and executing monetary treaties as well as membership of regional economic cooperation organizations (as a potential for using regional currency) on mutual exports between Iran and its 50 major trading partners during the period of 2000 to 2016 is investigated. The Generalized Commercial Gravity Model and Ordinary Least Square (OLS) regression of panel data with fixed effects are used. Countries' exports to each other are considered as dependent variables, and economic weight (log ratio of countries' GDP based on the purchasing power parity to each other), geographic distance between countries, real effective exchange rate and the degree of openness of the economy are independent explanatory variables. In addition, monetary treaties and the membership of the countries in the Asian Clearing Union, in the Economic Cooperation Organization (ECO) and in the Organization of Islamic Cooperation (OIC) are considered as dummy variables. The results show a positive and significant relationship between monetary treaties and the volume of exports of countries to each other. Also, the coefficients of dummy variables are significant and negative, indicating the lack of potential for the use of regional common currency among 51 countries over the considered period.
Keywords: Currency, Swap Currency, Optimum Currency Area (OCA), Economic and Monetary Convergence, Exchange Settlements, Panel Data
Full-Text [PDF 390 kb]   (867 Downloads)    
Type of Study: Original Research - Case Study | Subject: Economics
Received: 26 Aug 2018 | Accepted: 22 Sep 2019 | Published: 22 Sep 2019

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Volume 12, Issue 2 (Spring 2017) Back to browse issues page