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The Impact of Real Effective Exchange Rate on the Non-oil Export: The Case of Azerbaijan

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  • Fakhri, Hasanov

Abstract

The paper investigates the impact of the real exchange rate on non-oil exports in Azerbaijan by applying Vector Error Correction Model. The estimation results suggest that real exchange rate of manat has negative impact on non-oil export performance while non-oil GDP affects positively in the long- and short-run. Error correction term indicates that short-run fluctuation can be adjusted into long-run equilibrium relationship. Based on findings of the study can be concluded that appreciating real exchange rate is one of major factors that impede non-oil export growth. Since promotion of non-oil export is one of the urgent issues of the strategic economic policy of Azerbaijan Republic then findings of the study may be useful for policymakers.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 29556.

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Date of creation: 2010
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Handle: RePEc:pra:mprapa:29556

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Keywords: Azerbaijani economy; Non-oil export; Real effective exchange rate; Non-oil GDP; Dutch Disease; Vector Error Correction Model.;

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Cited by:
  1. Hasanov, Fakhri & Huseynov, Fariz, 2013. "Bank credits and non-oil economic growth: Evidence from Azerbaijan," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 597-610.

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