The Impact of Real Effective Exchange Rate on the Non-oil Export: The Case of Azerbaijan
AbstractThe 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 InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 29556.
Date of creation: 2010
Date of revision:
Azerbaijani economy; Non-oil export; Real effective exchange rate; Non-oil GDP; Dutch Disease; Vector Error Correction Model.;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- P28 - Economic Systems - - Socialist Systems and Transition Economies - - - Natural Resources; Environment
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