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Title
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Oil Price Shocks, Real Effective Exchange Rates and Macroeconomic Responses
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Type
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JournalPaper
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Keywords
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Real Effective Exchange Rate, Oil Price, Iran, SVAR model
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Abstract
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Oil price shocks have a special impact on the Iranian economy. The present paper adopts SVAR model to evaluate the empirical relation between oil price, real effective exchange rate and other macroeconomic variables for Iran, using monthly data for the period 2000-2011. We find a positive and statistically significant impact of real oil price on real effective exchange rate implying that increase in oil price leads to real effective exchange rate appreciation. The results suggest that oil prices may have been the dominant source of persistent real effective exchange rate shocks. We also find that oil prices are important in explaining stock price movements, furthermore oil price increases have a increases statistically significant impact on GDP.
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Researchers
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Nooshin Shokri (Second Researcher), mohsen ebrahimi (First Researcher)
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