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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.

Suggested Citation

  • Fakhri, Hasanov, 2010. "The Impact of Real Effective Exchange Rate on the Non-oil Export: The Case of Azerbaijan," MPRA Paper 29556, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:29556
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    File URL: https://mpra.ub.uni-muenchen.de/79559/1/MPRA_paper_29556.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Hasanov, Fakhri, 2012. "The impact of the real exchange rate on non-oil exports. Is there an asymmetric adjustment towards the equilibrium?," MPRA Paper 43728, University Library of Munich, Germany.
    2. 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.
    3. Megdam Khalil Ibrahim Khalil & Li Xiumin, 2014. "Identifying the Impact of RMB and SDG Exchange Rate Variability on the Trade Value between China and Sudan (1986-2012)," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 2(3), pages 141-158.

    More about this item

    Keywords

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

    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; State Space Models
    • O24 - Economic Development, Innovation, 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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