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Investigating the Co- Movement and Causality between Iran and Germany

Author

Listed:
  • Mansour Khalili Araghi

    (Professor; Faculty of Economics, University of Tehran)

  • Farideh Sadeghian Fard

    (M.A. in Economics)

Abstract

This study investigates the economic interdependence between Iran and her main historical trade partner, Germany. We want to see whether the business cycles are transferring from Germany to Iran via trade? By using SVAR model we have found that for period of 1990-2006, Germany have had a slight effect on Iran’s economy. Iran is the importer of capital and industrial goods from Germany, and the changes in her import conditions would have effect on domestic product and the supply side. However, we have found that the cycles and fluctuations in Iran have mainly been caused by her own domestic conditions. The trade barriers and control have reduced the effect of the fluctuations from Iran’s trade partner to move into Iran’s economy.

Suggested Citation

  • Mansour Khalili Araghi & Farideh Sadeghian Fard, 2011. "Investigating the Co- Movement and Causality between Iran and Germany," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 16(2), pages 1-9, spring.
    • Handle: RePEc:eut:journl:v:16:y:2011:i:2:p:1
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    References listed on IDEAS

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    3. Alicia García-Herrero & Juan M. Ruiz, 2008. "Do trade and financial linkages foster business cycle synchronization in a small economy?," Working Papers 0810, Banco de España.
    4. Prasad, Eswar S, 1999. "International Trade and the Business Cycle," Economic Journal, Royal Economic Society, vol. 109(458), pages 588-606, October.
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    Keywords

    Co- Movement; Germany; SVAR; Trade;
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