Real exchange rate and economic fundamentals : the case of a developing economy

Real exchange rate is an important variable in economy's growth. Its fluctuation reflected on the stability of a country's currency .as an important criterion shows the competitiveness of a country in the world. Misalignment of the RER causes disturbance on consumer price index and affects...

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Main Author:	Rasouli, Azam
Format:	Thesis
Language:	English
Published:	2004
Subjects:	Economic development - Iran Foreign exchange rates - Iran Iran - Economic conditions
Online Access:	http://psasir.upm.edu.my/id/eprint/51135/1/FEP%202004%2013RR.pdf
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id	my-upm-ir.51135
record_format	uketd_dc
spelling	my-upm-ir.511352017-04-07T09:03:01Z Real exchange rate and economic fundamentals : the case of a developing economy 2004 Rasouli, Azam Real exchange rate is an important variable in economy's growth. Its fluctuation reflected on the stability of a country's currency .as an important criterion shows the competitiveness of a country in the world. Misalignment of the RER causes disturbance on consumer price index and affects the prices of tradable goods, trade balance and the economic growth. Basically, the real exchange rate can be defined as the nominal exchange rate that takes the inflation differentials among the countries into account. Its importance stems from the fact that it can be used as an indicator of competitiveness in the foreign trade of a country. Because of the important role it plays in an economy as mentioned above, the real exchange rate has been one of the most debated issues both in terms of theory and the practice. This study discusses the existing definitions, calculation methods and interpretations of the real exchange rates. Within this context, the first part of the study will introduce different definitions of the real exchange rates. The calculation methods will be discussed in the second part. Finally, several points that should be taken into account in the interpretation of the real exchange rate movements will be highlighted. The model used in this study is based on the theoretical model developed by Edwards (1989), which is an intertemportal general equilibrium path of the real exchange rate. The ARDL aPJ?roachof cointegration was applied and the empirical analysis of section five shows that the Iranian economy has been subject to variability in the real exchange rate, reflecting the corresponding variability in both domestic (fiscal deficits and inflation) and external (terms of trade) factors. Economic development - Iran Foreign exchange rates - Iran Iran - Economic conditions 2004 Thesis http://psasir.upm.edu.my/id/eprint/51135/ http://psasir.upm.edu.my/id/eprint/51135/1/FEP%202004%2013RR.pdf application/pdf en public masters Universiti Putra Malaysia Economic development - Iran Foreign exchange rates - Iran Iran - Economic conditions
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
topic	Economic development - Iran Foreign exchange rates - Iran Iran - Economic conditions
spellingShingle	Economic development - Iran Foreign exchange rates - Iran Iran - Economic conditions Rasouli, Azam Real exchange rate and economic fundamentals : the case of a developing economy
description	Real exchange rate is an important variable in economy's growth. Its fluctuation reflected on the stability of a country's currency .as an important criterion shows the competitiveness of a country in the world. Misalignment of the RER causes disturbance on consumer price index and affects the prices of tradable goods, trade balance and the economic growth. Basically, the real exchange rate can be defined as the nominal exchange rate that takes the inflation differentials among the countries into account. Its importance stems from the fact that it can be used as an indicator of competitiveness in the foreign trade of a country. Because of the important role it plays in an economy as mentioned above, the real exchange rate has been one of the most debated issues both in terms of theory and the practice. This study discusses the existing definitions, calculation methods and interpretations of the real exchange rates. Within this context, the first part of the study will introduce different definitions of the real exchange rates. The calculation methods will be discussed in the second part. Finally, several points that should be taken into account in the interpretation of the real exchange rate movements will be highlighted. The model used in this study is based on the theoretical model developed by Edwards (1989), which is an intertemportal general equilibrium path of the real exchange rate. The ARDL aPJ?roachof cointegration was applied and the empirical analysis of section five shows that the Iranian economy has been subject to variability in the real exchange rate, reflecting the corresponding variability in both domestic (fiscal deficits and inflation) and external (terms of trade) factors.
format	Thesis
qualification_level	Master's degree
author	Rasouli, Azam
author_facet	Rasouli, Azam
author_sort	Rasouli, Azam
title	Real exchange rate and economic fundamentals : the case of a developing economy
title_short	Real exchange rate and economic fundamentals : the case of a developing economy
title_full	Real exchange rate and economic fundamentals : the case of a developing economy
title_fullStr	Real exchange rate and economic fundamentals : the case of a developing economy
title_full_unstemmed	Real exchange rate and economic fundamentals : the case of a developing economy
title_sort	real exchange rate and economic fundamentals : the case of a developing economy
granting_institution	Universiti Putra Malaysia
publishDate	2004
url	http://psasir.upm.edu.my/id/eprint/51135/1/FEP%202004%2013RR.pdf
_version_	1747812058396622848

Real exchange rate and economic fundamentals : the case of a developing economy

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