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Measuring the Real Exchange Rate Misalignment and the Factors Affecting it in the OPEC Member Countries (Emphasizing on the Capital Account Openness and Exchange Rate Flexibility)
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Sadra Komlakh   , Mohammad Reza Farzin * , Karim Emami Jaze |
| , b_farzin@yahoo.com |
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Abstract: (2064 Views) |
| Changes in the real exchange rate affect a country's balance of payments and international competitiveness, and its misalignment from the long-run equilibrium level usually creates imbalances in the macro economy. This is also important in countries with oil resources due to their foreign trade structure. Accordingly, due to the existence of few internal studies on the subject in selected countries with specific common features, the purpose of this study is to investigate the factors affecting the real exchange rate misalignment in the OPEC member countries in the period 2000-2020. In this regard, with calculating the real exchange rate, equilibrium values and ultimately its misalignment in the selected research sample with approaches more consistent with theoretical foundations, the factors affecting the real exchange rate misalignment such as capital account openness and exchange rate flexibility has been examined by Generalized Method of Moment (GMM) technique. The results, in addition to showing the real exchange rate misalignment in each of the countries, show that the capital account strategy and exchange rate flexibility have a significant effect on the real exchange rate imbalance. Finally, some suggestions based on the research results are presented. According to the research results, adopting a managed floating exchange rate system, preventing the increase of money and liquidity and planning to reduce the conversion of dollars from natural resources into national currency, controlling inflation and thus maintaining the competitiveness of oil exporting countries in comparison It has been proposed with other countries as policy solutions. |
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| Keywords: Real Exchange Rate, Real Exchange Rate misalignment, Hodrick-Prescott filter, Capital account openness, Exchange rate flexibility |
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Full-Text [PDF 1469 kb]
(547 Downloads)
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Type of Study: Research |
Subject:
Special
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