Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach
Given the importance of identifying the relationship between exchange rate and trade balance in adoption of appropriate economic adjustment policies and the requirement of accurate estimation of elasticity of trade balance to income and price changes for proper timing of such policies, in this study...
| Main Authors: | , , |
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2014-09-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_798_7bf0fcdbdd25713954199056aeaaf221.pdf |
| _version_ | 1797375679099043840 |
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| author | Hassan Heidari Zahra Salehiyan Salehi Nejad Soleiman Feizi |
| author_facet | Hassan Heidari Zahra Salehiyan Salehi Nejad Soleiman Feizi |
| author_sort | Hassan Heidari |
| collection | DOAJ |
| description | Given the importance of identifying the relationship between exchange rate and trade balance in adoption of appropriate economic adjustment policies and the requirement of accurate estimation of elasticity of trade balance to income and price changes for proper timing of such policies, in this study the effect of domestic and foreign income and real exchange rates on the Iranian trade balance has been investigated. Moreover, the reactions of trade balance to changes in the variables of interest have been estimated using time varying parameter models over the period of 1338-1389.The results show that the coefficients of the estimated model are not constant over the time and they are influenced by structural changes such as: oil price shocks, economic policies and exogenous shocks such as the imposed war and the Islamic revolution. By comparing the price elasticity of the balance of trade and the real exchange rate, it can be seen that by increasing real exchange rates during the period of 47-50 and 56-67, the price elasticity is positive and becomes negative when real exchange rates reduce. |
| first_indexed | 2024-03-08T19:27:55Z |
| format | Article |
| id | doaj.art-ca45f55f0dc54161a3d5c31fb221d541 |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:27:55Z |
| publishDate | 2014-09-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-ca45f55f0dc54161a3d5c31fb221d5412023-12-26T07:59:41ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532014-09-0114546799798Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter ApproachHassan Heidari0Zahra Salehiyan Salehi Nejad1Soleiman Feizi2دانشیار اقتصاد دانشگاه ارومیهکارشناس ارشد دانشگاه ارومیهاستادیار اقتصاد دانشگاه ارومیهGiven the importance of identifying the relationship between exchange rate and trade balance in adoption of appropriate economic adjustment policies and the requirement of accurate estimation of elasticity of trade balance to income and price changes for proper timing of such policies, in this study the effect of domestic and foreign income and real exchange rates on the Iranian trade balance has been investigated. Moreover, the reactions of trade balance to changes in the variables of interest have been estimated using time varying parameter models over the period of 1338-1389.The results show that the coefficients of the estimated model are not constant over the time and they are influenced by structural changes such as: oil price shocks, economic policies and exogenous shocks such as the imposed war and the Islamic revolution. By comparing the price elasticity of the balance of trade and the real exchange rate, it can be seen that by increasing real exchange rates during the period of 47-50 and 56-67, the price elasticity is positive and becomes negative when real exchange rates reduce.https://joer.atu.ac.ir/article_798_7bf0fcdbdd25713954199056aeaaf221.pdftrade balanceexchange ratetime varying parameter |
| spellingShingle | Hassan Heidari Zahra Salehiyan Salehi Nejad Soleiman Feizi Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī trade balance exchange rate time varying parameter |
| title | Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach |
| title_full | Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach |
| title_fullStr | Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach |
| title_full_unstemmed | Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach |
| title_short | Investigation and Analysis of Iran’s Trade Balance Reaction to Exchange Rate Changes: A Time Varying Parameter Approach |
| title_sort | investigation and analysis of iran s trade balance reaction to exchange rate changes a time varying parameter approach |
| topic | trade balance exchange rate time varying parameter |
| url | https://joer.atu.ac.ir/article_798_7bf0fcdbdd25713954199056aeaaf221.pdf |
| work_keys_str_mv | AT hassanheidari investigationandanalysisofiranstradebalancereactiontoexchangeratechangesatimevaryingparameterapproach AT zahrasalehiyansalehinejad investigationandanalysisofiranstradebalancereactiontoexchangeratechangesatimevaryingparameterapproach AT soleimanfeizi investigationandanalysisofiranstradebalancereactiontoexchangeratechangesatimevaryingparameterapproach |