نرخ ارز حقیقی

The real exchange rate reflects the level of competitiveness in the international market. High volatility of this variable indicates economic instability, which hinders rational decision-making and direction for economic actors. Therefore, policymakers strive to minimize the fluctuations of this variable as much as possible. With the sanctions and the resulting damages to various sectors of foreign trade, the fluctuation of the real exchange rate has a greater importance for the Iranian economy compared to other economies. Therefore, choosing an appropriate policy plays a significant role in the stability of the country's economy. Although the stability of the exchange rate has been mentioned in the sixth and seventh development plans, no specific rule has been mentioned to achieve it. Therefore, in this study, two policies, inflation-based exchange rate rule and the pattern including interest rate, are evaluated First, the modified Edwards model (1989) is estimated by 1960-2020 data. Then, in order to evaluate the impact of inflation shocks and interest rates on the behavior of the real exchange rate, impulse response function analysis is also used. The results indicate that inflation shocks have long-term effects on the real exchange rate, and therefore, the occurrence of an exogenous inflation shock quickly leads to a deviation of the future exchange rate from its equilibrium level. On the other hand, according to the impulse response function of the interest rate, the effects of interest rate changes are adjusted at a slower pace, and the exchange rate returns to its equilibrium level. Therefore, adopting a rule-based exchange rate policy based on inflation targeting can help achieve the desired goals of the country's development plans.

The enabling factor for entering the process of globalization is the creation of a competitive enviroment. The goal is to achieve competitive power through growth, development, and improvement in the quality of life. Competitiveness is the foundation for the economic growth of countries worldwide, and the real exchange rate is a good indicator for examination of a country's competitiveness in global markets. It is a variable through which we can assess the relative price of traded and non-traded goods. If there are no changes in the relative prices of other countries in the world and the real exchange rate decreases, it indicates a weakening of the international competitiveness of domestically produced goods. High fluctuations and lack of stability in real exchange rates can create an unstable environment for international trade and, as a result, reduce trade. Given the significance of the real exchange rate in influencing other macroeconomic variables and creating an uncertain environment, having knowledge of the future changes in the real exchange rate can play a crucial role in assisting monetary authorities to increase employment levels and stabilize prices.Since many microeconomic and macroeconomic variables are influenced by the exchange rate, a proper understanding of the linear or nonlinear behavior of the exchange rate can help policymakers, firms, and traders make accurate decisions in order to effectuate desired changes.

 THEORETICAL FRAMEWORK:

The relationship between the national currency and the value of the national currency against foreign currencies is called the exchange rate. In international banking, the term "currency" refers to foreign money, sometimes including the adjective "foreign" to distinguish it from the domestic or local currency of a country. Currency is not limited to banknotes issued by central banks. It includes documents such as checks, drafts, and promissory notes that are used for international payments.Due to resource allocation based on relative prices in the free market, efficient resource allocation occurs when relative prices are properly adjusted and serve as an indicator of the real value of resources. The exchange rate is one of the most important prices, and deviations from equilibrium can disrupt the prices of other goods and services. Generally, exchange rates are divided into several categories: 1) Nominal exchange rate, 2) Real exchange rate, 3) Effective nominal exchange rate. The nominal exchange rate is the price of one unit of a currency in terms of another currency on a specific day and at a specific time. The mention of a specific time is necessary because the exchange rate may change during different hours of the day. It is common to express the price of one unit of foreign currency in terms of domestic currency in exchange rate calculations.Changes in the real exchange rate have a significant impact on the balance of payments and the international competitiveness of a country. Economists agree that an inappropriate level of stability for the real exchange rate leads to a decrease in national welfare. Thus, the instability of the real exchange rate from its equilibrium level leads to severe imbalances in the economy.

To investigate the nonlinear behavior of the real exchange rate in Iran and in order to examine the nonlinear behavior of the real exchange rate in Iranian economy during the years 2004:04- 2018:02 two models have been applied: Self-Exciting Threshold Autoregressive (SETAR) model and Logistic Smooth Transition Autoregressive (LSTAR) model.

The possibility of threshold behavior in the real exchange rate has been confirmed by Broock, Dechert, and Scheinkman (1987) and Hansen (1999) test. Subsequently, the threshold values for the growth of the real exchange rate were calculated to be 3.84% in the first model (SETAR) and 5% in the second model (LSTAR).In the first model, when the growth rate of the real exchange rate is below 3.84%, the growth rate of real exchange rate is minimal and classified as a regime with low growth. If the growth rate of the real exchange rate exceeds the threshold value (3.84%), its stability increases. In other words, when the growth rate of the real exchange rate is severe in Iran's economy, it is expected to be stable.In the second model, values less than 5% are classified as a regime with low growth, while values greater than 5% are classified as a regime with high growth. The estimated coefficients for different orders in the two regimes indicate that if the growth rate of the real exchange rate is greater than 5%, this variable will exhibit stable behavior. However, at values below the threshold, due to the insignificance of the coefficients, this property will not be applicable.

CONCLUSIONS & SUGGESTIONS:

The results demonstrated the possibility of nonlinear behavior in the growth rate of the real exchange rate. After calculating the optimal order for AR and considering other econometric requirements (Hansen test), two models, namely SETAR and LSTAR, were estimated. The threshold value was calculated to be 3.84% for the first model and 5% for the second model. In both models, it was observed that as long as the growth rate of the real exchange rate remains in a severe regime, it exhibits significant stability and is positively influenced by its past values.

One of the most important challenges of Iran's economy in recent decades is its excessive reliance on oil revenues. According to the time series of the central bank, during the years after the Islamic revolution and especially the years after the imposed war, on average 80 to 90 percent of the export income, 40 to 50 percent of the government's annual budget and 20 percent of the country's total gross domestic product It is provided from the place of oil export. Based on this, the development of the export of non-oil products with a relative advantage in the world markets is considered an inevitable requirement for the country of Iran. In other words, due to the strong dependence of the country's economy on oil on the one hand and the instability and extreme fluctuations of oil prices in the world markets, as well as due to the dominance of a multilateral monopoly market on it on the other hand, many anomalies that rule this market It is transferred inside and causes economic activities to fluctuate according to the exchange rate (Maghdisi and Ali-Shahi, 2016). According to economic planners and policy makers; The only way to free the country from the single-product economy and dependence on foreign exchange income from the sale of oil, as well as to meet the country's ever-increasing foreign exchange needs, is to develop non-oil exports and access global markets. If the foreign currency demand for imports is met from the foreign exchange earnings of non-oil exports, the country's economy will not need oil export earnings and the direct injection of these oil foreign exchange resources into the domestic economy in the current form. For this reason, the economic policy makers in Iran have paid special attention to the improvement of the non-oil trade balance in the medium-term (economic and social development programs) and long-term (Perspective Document of Iran 1404) programs of the country and mainly emphasized on The monetary and banking sector has been supported by granting facilities with lower interest than non-oil producers and exporters.
Due to the importance of this issue, in this study, the role of currency fluctuations in the impact of monetary policies on Iran's non-oil trade balance has been analyzed seasonally, with an emphasis on regime changes during the period of 1352-1396. In this regard, EGARCH regression has been used to model currency fluctuations and STAR regression has been used to investigate the role of these fluctuations in the impact of monetary policy on the non-oil trade balance.

Following the empirical studies, the following model has been considered to achieve the goals of this study:                                    (1)
where in,
lxtmt: natural logarithm of the ratio of non-oil exports to total imports in year t;
lrexcht: the natural logarithm of the real exchange rate (the product of the free market exchange rate by the global producer price index divided by the producer price index in Iran) in year t;
vrexcht: currency volatility index (conditional variance of variable lrexch_t) in year t;
lmtgdpt: the natural logarithm of the ratio of total liquidity to Iran's nominal GDP in year t;
vrexch*lmtgdpt: the natural logarithm of the ratio of total liquidity to Iran's nominal GDP in the currency volatility index
loilxt: natural logarithm of revenues from oil and gas exports in million dollars in year t;
lopenesst: natural logarithm of trade openness index (ratio of total trade to nominal GDP) in year t;
εt: is the residual of the model in year t.
After estimating exchange rate fluctuations by EGARCH regression in the period of 1352-1996 on a seasonal basis, the STAR model was used to investigate the role of exchange rate fluctuations in the impact of monetary policies on Iran's non-oil trade balance, emphasizing regime changes in the period. The study is estimated. Also, all the data were obtained from the database of the Central Bank of the Islamic Republic of Iran and the World Bank.

The results of STAR model estimation showed that there are two regimes including high and low regime with a threshold value of -4.055 for the trade balance variable in the studied time period. The results related to the low regime (trade balance less than -4.055) show that the variables of trade balance with one break, real exchange rate, currency volatility index with monetary policy, liquidity and trade openness index are respectively 980/ 13, -1.299, -0.462, -1.404 and -2.484 have an effect on the trade balance. In the above regime (trade balance more than 4.055), variables of trade balance with one break, real exchange rate, currency volatility index with monetary policy, liquidity and trade openness index are 25.601, 1.604, 562 respectively. 0.0, 2.177 and 3.158 have an effect on the trade balance. Therefore, in the low regime, the exchange rate fluctuation has a negative effect on the trade balance, and in the low regime, it has a positive effect. This result can be due to the severe exchange rate fluctuations in the post-revolution period, which caused domestic goods to become cheaper compared to foreign goods and increased non-oil exports due to the decrease in the value of the national currency. Although the increase in non-oil exports in the country is mainly in the form of raw materials and agricultural products, and industrial products have a very small share in the country's exports. The dependent variable coefficient with one break in both regimes has a positive effect on the trade balance in the current period, which is consistent with empirical studies. Other variables have negative coefficients in the low regime and positive coefficients in the high regime, which shows that the real exchange rate, liquidity and trade openness had a negative effect on the trade balance in the period before and at the beginning of the revolution until the fourth quarter of 2012. But after 2012, the mentioned variables have had a positive effect on the trade balance. The reason for this can be due to the decreasing trend of the trade balance during the period of the low regime, which could not have a positive role on the trade balance due to the excess of imports and the lack of non-oil exports, the variable of trade openness, as well as the exchange rate and liquidity. But in the above regime, which lasts from the first quarter of 2013 to the fourth quarter of 2016, the trend of the trade balance is increasing in these years. Therefore, the aforementioned factors have also played a positive role in increasing the trade balance, although as it was said, most of the country's non-oil exports are from the raw materials of industrial production and agricultural products, and it cannot be said that the improvement of the trade balance during the high regime period is due to It has been an increase in the export of industrial products. The results obtained from this research are consistent with the results of the studies of Wong and Chong (2016), Gomez and Alvarez (2006). Also, the results of the research of Agbola (2005) and Gilfason and Risagar (1984) are in accordance with the results of this study in the low regime. From the point of view of the effect of liquidity on the trade balance, the results obtained are consistent with the research of Fitras et al. (2014).

The results of STAR model estimation showed that there are two regimes including high and low regime with a threshold value of -4.055 for the trade balance variable in the studied time period. The results related to the low regime (trade balance less than -4.055) show that the variables of trade balance with one break, real exchange rate, currency volatility index with monetary policy, liquidity and trade openness index are respectively 980/ 13, -1.299, -0.462, -1.404 and -2.484 have an effect on the trade balance. In the above regime (trade balance more than 4.055), variables of trade balance with one break, real exchange rate, currency volatility index with monetary policy, liquidity and trade openness index are 25.601, 1.604, 562 respectively. 0.0, 2.177 and 3.158 have an effect on the trade balance. Therefore, in the low regime, the exchange rate fluctuation has a negative effect on the trade balance, and in the low regime, it has a positive effect. This result can be due to the severe exchange rate fluctuations in the post-revolution period, which caused domestic goods to become cheaper compared to foreign goods and increased non-oil exports due to the decrease in the value of the national currency. Although the increase in non-oil exports in the country is mainly in the form of raw materials and agricultural products, and industrial products have a very small share in the country's exports. The dependent variable coefficient with one break in both regimes has a positive effect on the trade balance in the current period, which is consistent with empirical studies. Other variables have negative coefficients in the low regime and positive coefficients in the high regime, which shows that the real exchange rate, liquidity and trade openness had a negative effect on the trade balance in the period before and at the beginning of the revolution until the fourth quarter of 2012. But after 2012, the mentioned variables have had a positive effect on the trade balance. The reason for this can be due to the decreasing trend of the trade balance during the period of the low regime, which could not have a positive role on the trade balance due to the excess of imports and the lack of non-oil exports, the variable of trade openness, as well as the exchange rate and liquidity. But in the above regime, which lasts from the first quarter of 2013 to the fourth quarter of 2016, the trend of the trade balance according to figure (2) is increasing in these years. Therefore, the aforementioned factors have also played a positive role in increasing the trade balance, although as it was said, most of the country's non-oil exports are from the raw materials of industrial production and agricultural products, and it cannot be said that the improvement of the trade balance during the high regime period is due to It has been an increase in the export of industrial products. The results obtained from this research are consistent with the results of the studies of Wong and Chong (2016), Gomez and Alvarez (2006). Also, the results of the research of Agbola (2005) and Gilfason and Risagar (1984) are in accordance with the results of this study in the low regime. From the point of view of the effect of liquidity on the trade balance, the results obtained are consistent with the research of Fitras et al. (2014)                                
Based on the above results, it is recommended that the monetary policy makers take into account the currency fluctuations in order to improve the non-oil trade balance through monetary policies. In other words, monetary policies should be used to improve the non-oil trade balance when the currency market is less volatile. Or at least, appropriate currency policies to reduce currency fluctuations along with monetary policy should be considered simultaneously in improving the trade balance. Based on this, if there are severe currency fluctuations, monetary policies in the country cannot improve the non-oil trade balance. This shows that the growth of liquidity in the country regardless of its origin, if the currency market in the country does not reach the necessary stability, it cannot be considered a powerful tool in improving the country's non-oil trade balance. Also, the export of the country should be shifted from the export of raw materials to the export of finished goods and industrial products. Because as the trend of the country's trade balance showed, the trade balance with non-oil exports has been negative in the entire time period studied, and for the trade balance with non-oil exports to be positive, industrial production must increase, which will ultimately bring economic growth and development.

The aim of this article is to assess the effects of the real exchange rate on housing prices in 31 provinces of Iran by of the static and dynamic spatial panel model framework over the period of 2011 to 2020. The findings indicate a positive effect of the real exchange rate on housing prices in the provinces of Iran, which is consistent with the research conducted in this area. In addition, per capita income has a negative effect on housing prices, indicating the non-substitutability of food and non-food expenses in the household expenditure basket and the need for significant liquidity to afford housing. This finding is in line with the results of some other studies. Evaluating the spillover effects of housing prices in the provinces of Iran using static and dynamic spatial panel models demonstrates that a change in housing prices in one province affects housing prices in neighboring provinces. This result confirms the ability of housing shocks to spread at the national level. Furthermore, the evidence shows that the long-term spillover effect of the real exchange rate on housing prices is unstable, while in the short term, this effect is positive. Therefore, the overall effect of the real exchange rate on housing prices is positive in both the short and long term, and stability in the foreign exchange market will contribute to improving the housing market conditions.

The effect of monetary policy on the exchange rate in the Dornbusch’s point of view is that unpredictable changes in the money supply play a major role in exchange rate fluctuations. In a fixed exchange rate system, keeping the country's currency stable against foreign currency stabilizes a country's currency and provides grounds for increasing the credibility of policy makers; at the same time, the floating currency system provides the basis for removing the effects of external shocks from the economy. In addition, the use of a fixed exchange rate system has reduced the uncertainty of the real sectors of the economy, and this issue can improve international trade and domestic investment. However, the use of a floating exchange rate system can lead to the independence of monetary policy in the face of shocks and can be considered as a tool to stabilize the economy in times of business cycles.

THEORETICAL FRAMEWORK:

The theory of exchange rate overshooting was proposed for the first time by Dornbusch in 1976. If the economy is continuously exposed to unexpected monetary expansion, the exchange rate will exceed its long-term trend in the short term and return to its long-term level in the long term. The overshooting in the exchange rate is a short-term phenomenon that is formed due to the price sticky in the short term and the high adjustment speed in the financial market and the slow adjustment in the real sector of the economy. The dominant core of monetary systems is the use of a "nominal anchor". The nominal anchor is a variable that is used to achieve the goal of monetary policy, and the purpose of its authority is to adjust inflationary expectations and commit the monetary authorities to achieve the declared goals. The innovation of the present study compared to the previous studies is the use of a dynamic approach as well as the examination of the exchange rate jump in the conditions of a stable and floating exchange rate system, which has been less considered in previous studies.

The purpose of this paper is to investigate the relationship between monetary policy and exchange rate overshooting in the Iranian economy. In order to test the experimental model of the research, the data of the period 1989-2020 based on the frequency of seasonal data and the generalized moment method (GMM) were used. Based on this, in the form of two stable and floating exchange systems, the rate of jump and deviation in the exchange rate has been calculated by using the Hodrick-Prescott filter and the effect of monetary policy and macro variables on the exchange rate overshooting has been calculated.

The results showed that the monetary policy leads to an overshooting in the exchange rate and creating a deviation in the exchange rate, and this issue has been more severe in the floating exchange rate system compared to the fixed exchange rate system. Also, the results showed that the production gap had a significant effect on reducing the deviation of the real exchange rate. On the other hand, based on the estimated coefficient, it was observed that the deviation of the inflation rate leads to an increasingly deviation of the real exchange rate.

 CONCLUSIONS & SUGGESTIONS:

Since the relationship between monetary policy and exchange rate is positive, with an expansionary monetary policy, the exchange rate increases, which means the value of the national currency decreases. Therefore, in order to reduce the negative effects of monetary policy on the value of the national currency, it is suggested that appropriate policies and executive tools be designed and implemented by the government so that with proper management, it can be placed on the path of economic activities in the society. There is a need for monetary policy stability, which itself requires the existence of an independent central bank.

The exchange rate is one of the most important macroeconomic variables, and how it affects other economic variables, including GDP, is one of the most important challenges in macroeconomics, especially in the last few decades, industrialized and developing countries. The purpose of this study is to investigate the factors affecting the GDP of selected countries by emphasizing the role of exchange rates with the ARDL-PMG approach. The results indicate that in developed countries and developing countries in the long run the exchange rate Real has a negative and significant effect on GDP. On the other hand, the variables of physical capital accumulation, government spending, the degree of openness of the economy and liquidity have a positive effect on GDP. In this regard, the variable of physical capital accumulation has had the highest positive impact on GDP in both developing and developed countries. At the same time, the negative effect of exchange rates on GDP in developing countries is greater than in developed countries. Therefore, according to the results of this study, economic risks in developing countries are higher than developed countries.

The aim of this study is to investigate the short-term and long-term asymmetric effects of exchange rate on Iran’s gross domestic product (GDP). Considering the importance of the issue in policy making and the possibility of influencing production through exchange rate, in this study, the effects of positive and negative exchange rate shocks on Iran's GDP in the short and long term with nonlinear distributed autoregressive lags (NARDL) have been investigated in the period of 1991 to the fourth quarter of 2018 and the "Shine et al" model is the main basis of the research. For this purpose, using explanatory variables of liquidity volume, exchange rate, degree of openness of economy, gross domestic capital stock, labor and oil prices, through band test confirms the existence of a long-term asymmetric equilibrium relationship and also confirms the results of asymmetric relationship between real exchange rate and GDP. In the short term, the decrease in real exchange rate leads to an increase in GDP and an increase in the exchange rate has negative and significant effects on GDP, and in the long run, the severity of negative shocks has been more than positive shocks, this effect has been positive and asymmetric.

The aim of this study was to investigate the role of Islamic financial instruments inthe occurrence of business cycles in the Iranian economy. In this regard, theemphasis has been on Islamic participation bonds offered by the Central Bank. Forthis purpose, statistical data from the period 1992-2020 and structural vectorautoregression model (SVAR) were used. The results of this study showed that theimpetus from the supply of participation bonds as a tool for monetary policy and anIslamic financial instrument has led to the fact that the amount of business cycles inthe Iranian economy is not moderated. In fact, the results showed that the variablesof budget deficit, exchange relationship and price were the most important variablesaffecting business cycles in the Iranian economy. The results showed thatparticipation bonds could not act as an anti-cyclical policy tool in the Iranianeconomy. Considering the results of how Islamic financial instruments affectbusiness cycles in the Iranian economy, it is necessary to recognize the impact ofgovernment budget deficit and its financing.

The relationship between exchange rate changes and trade balance has always been one of the major issues in theoretical literature and policy circles. A new approach to theoretical literature and empirical work suggest that the interaction of these two variables depends on a number of issues, including how each country's export and import markets interact, and the degree to which exports of goods are dependent on imports. For this purpose, in the paper, the relationship between exchange rate and trade balance in the Iranian economy is examined by considering the crucial role of Intra –industry trade in the form of smooth transition regression model for the period 2001: 4 to 2018: 4. The results showed that the coefficient of effect of the exchange rate on the trade balance in each period is affected by the intra--industry index, so that the lower the index, the less the effect of the exchange rate increase on the trade balance, and as this index improves, the impact is greater. This means that the positive effects of money devaluation on the trade balance can be benefited when the competitiveness of domestic products with similar foreign goods in each sector increases.

Recognizing the effective factors in the formation and fluctuations of the exchange rate in the long run, as well as knowing how the exchange rate influents from economic policies to align with the desired goals are among the necessities of a successful economic plan. Accordingly, this study investigates the long-term and short-term factors affecting the real exchange rate of Iran and estimates the coefficients of the relevant variables using the vector error correction model (VECM) in the framework of behavioral equilibrium exchange rate model (BEER). Monitoring the trend of deviation of the actual real exchange rate from the long-term equilibrium exchange rate during the years 1973-2017, according to the selected quantitative goals of the Sixth Economic Development Plan of Iran, the real exchange rate and the equilibrium exchange rate of the country has been estimated during. The results of this study show that due to the failure to achieve the goals in the first three years of the Sixth Plan, the nominal exchange rate gap from the equilibrium exchange rate has reached an average of about 25 percent annually. In addition, the pressure of monetary inflation, reduced production growth and increased systemic risk of the country has led to a continuous increase in the nominal exchange rate in the parallel market.

This research assesses the time inconsistency of monetary policy in Iran using the exchange rate targeting approach. The level of alignment of Nominal anchor (money growth) with the actual values of the economy indicates weak credibility of monetary policy. The empirical model uses seasonal data for the period of 1989-2017 based on generalized method of moments (GMM). The results show that the effect of the output gap on the reduction of the exchange rate deviation in the floating exchange rate is more than the fixed system. It is observed that, contrary to the output, the effect of the inflation rate gap on the exchange rate deviation in the floating exchange rate system is less than the fixed exchange rate system. This suggests that in terms of exchange rate targeting and commitment to a ruled monetary policy, the impact of the inflation gap is higher on the exchange rate gap in the fixed exchange rate system compare to floating one.

The purpose of this study is to investigate the Balassa-Samuelson hypothesis, with an emphasis on the ratio of skilled to unskilled labour. In order to, the Balassa-Samuelson hypothesis was tested using the non-linear Markov-switching method during the period 1973-2016, for Iran economy. Using the Akaike information criterion, MSMAH(2)-AR(3) model was selected as the optimal model, to examine the effect of productivity on the real effective exchange rate. The results showed that the effect of productivity on the real exchange rate was split into two regimes, during the studied period, so that the effect of productivity on the real exchange rate was equal to -0.59 in the regime zero and it was equal to -0.84 in the regime one. So the regime zero is a regime in which the impact of productivity on the real exchange rate is low and the regime one is a regime in which the impact of productivity on the real exchange rate is high. In general, it is observed that the effect of productivity on the real effective exchange rate is negative and significant in both regimes for Iran economy with relative abundance of unskilled labour and the Balassa-Samuelson hypothesis does not hold in any of the two regimes.

The purpose of this study was to evaluate the impact of macroeconomic variables such as exchange rate, short-term interest rate, per capita income, unemployment rate on Durable Goods Consumption among urban households of Iran's provinces during 2006-2017. In this study, a random dynamic panel using the generalized spatial Durbin momentum model SGMM-DPD-SDM spatially generalized torque model using Arellano-Bover / Blundell-Bond Two-Step coefficients will be used to estimate the econometric model. Also, to determine the proximity matrix, the proximity and correlation method was used in the form of a 28 by 28 square matrix. The results showed that the real exchange rate with a factor of 11/735 had the most negative impact and the real per capita income with a factor of 8/102 had the most positive effect on the real on  Durable Goods Consumption. The real interest rate has the lowest effect with a coefficient of -0/133 and is almost in line with the experimental results, because buying foreign exchangeable durable goods is not subject to receiving facilities in the Iranian banking system and the share of domestic producers of durable goods can be exchanged in the Iranian market. This is exactly 25%, which confirms the strong impact of the exchange rate on reducing the Consumeof durable goods. Because durable goods that can be exchanged for import, whose price increases exactly with the exchange rate, in 2019, they have a 75% share of the Iranian market. Unemployment rate with a coefficient of -0/101 has a negative impact on purchasing power.

Exchange rate and foreign exchange policies in Iran have always been one of the main challenges of the country's economy. Almost in all periods, various and challenges were about how the exchange rate is determined and what will be its effects on economic variables, especially foreign trade and balance of payment. In this regard, the present study examines the effect of the real exchange rate on the trade balance between Iran and one of its largest current partners, China, using the nonlinear symmetric method over the period of 1993-2016. The results show that on the one hand, the most appropriate method in such studies is the use of asymmetric and nonlinear models. On the other hand, the increase of the exchange rate, which is the depreciation of the Rial against the Yuan, improves in the long-run and shor-run, although its long-term effect has been more than its short-term effects. But the depreciation of the Yuan makes the balance in favor of China, as well as the effect of the depreciation of the exchange rate more than its effect on the trade balance between the two countries. Therefore, it is suggested that the realization of the value of the Rial against the yuan and allowing the depreciation of the national currency in line with inflation and other indicators would increase the competitiveness and expand foreign trade.

This study examines the effects of ownership, competitiveness, firm size and research and development (R&D) expenditure on exports of Iran's vehicles manufacturing industries. A panel data model is set up using 4-digit codes of the International Standard Industrial Classification (ISIC) related to vehicles manufacturing industries in Iran over the period 2005-2013. The dynamic panel data technique and two-stage generalized method of moments (Arellano and Band method) are used to estimate the econometric model. The estimation results indicate positive and significant effects of private ownership, R&D expenditure and competitiveness on export intensity in Iran's vehicles manufacturing industries. According to the positive effect of the private ownership on exports, facilitating the entrance of the other private firms aiming at producing and exporting of vehicles’ products can be a considerable step for promoting foreign trade in Iran. In addition, findings show that real exchange rate has no significant effect on export intensity among mentioned industries. Moreover, higher tariff rates on imports of vehicles in Iran and higher relative prices of vehicles compared to world prices have limited the potential of exporting the products of such industries.

In this research, the effect of oil price uncertainty on economic growth has been studied using the Generalized Method of Moments (GMM) during the period 1961-2015 in the group of oil exporting countries and oil importers group. Therefore, at first, the uncertainty index due to oil price fluctuations has been estimated using the Exponential Generalized Autoregressive Conditional Heteroskedasticity (EGARCH) model .The research findings show that the uncertainty of the oil price on economic growth is asymmetrical. Also, the results of fitting the dynamic panel model using the GMM method indicate that oil prices uncertainty have a negative effect on economic growth both in the group of oil exporting countries and in the group of oil importing countries. While in both countries, the investment growth rate, Real exchange rate and population growth rate are positively correlated with economic growth.

Iran has exported more than half a billion dollars’ worth of handmade carpet, which is about one quarter of the handmade carpet global market on average in the 1979- 2014 period. This research estimates the impacts of exchange rate volatility on the carpet exports using the General Auto-Regressive Conditional Heteroskedasticity (GARCH) model, J-J cointegration test and the vector error correction model (VECM). The results show that the real exchange rate, weighted average gross income of carpet importing countries, and inflation rate have positive impacts on the export of carpets. Results also show that exchange rate volatility effect is negative and significant in the short term. The J-J test results with effect test and maximum-eigenvalue test show that there is at least one long-run relationship. The VECM model also show that the exchange rate and exchange rate volatility are divergent and inflation rate and national income are convergent. Exchange rate volatility leads to income volatility of suppliers and price volatility for importers. Exchange rate volatility risk increases the risk of investment and production in the carpet industry and has a negative impact on the supply of carpets. On the demand side, as increasing market risk leads to the postponement or cancellation of the purchases, because the buyers are facing purchase price volatility. The stable monetary and foreign exchange rate policies will have positive impacts on the carpet exports and therefore are desirable.

This article develops the traditional two-part model in which uses labor and capital. That is, in this model, for production are used capital, skilled labor and unskilled labor. It is assumed; tradable sector for production use capital and skilled labor and non-tradable sector use capital and unskilled labor. The main objective of this article is investigation the effects of productivity on the real exchange rate index according to the abundance of skilled and unskilled labor. For this purpose, This article are used pooled data including Iran and trade partners of Iran in the period 2000-2015 using Fixed Effects (FE), Dynamic Ordinary Least Square (DOLS), Fully Modified Ordinary Least Square (FMOLS) and Pooled Mean Group (PMG) methods. The Estimated results show that the increase in productivity will lead to higher (lower) real exchange rate appreciation in countries that have the high abundance of (unskilled) skilled labor.

In general, the main objective of monetary policies is to stabilize the key macroeconomic variables, especially the inflation around its target. However, the role of some variables such as the real exchange rate can be important in optimal monetary policy responses to commodity terms of trade shocks in commodity dependent emerging market economies, such as oil-exporting countries. This study tries to examine the impacts of different monetary policy in order to minimize the adverse effects of the economic shocks, by considering the real exchange rate gap into the flexible inflation targeting rule, in the Iranian economy. Hence, using a new Keynesian model, the demand and Phillips curves are estimated by autoregressive distributed lags (ARDL) method, based on the quarterly data during 1991:Q1-2014:Q4 and then a loss function for the central bank is minimized subject to above equations, by using the optimal control approach. According to the results, when the real exchange rate gap is calculated based on the lower targets, existence of this variable in the loss function of the monetary authorities lead to lower losses. But the higher real exchange rate gap is accompanied by higher losses. For summary, dependent on the real exchange rate gap, the monetary author can use the target of the exchange rate as a policy target. However, the flexible inflation targeting monetary framework, with regards to real exchange rate targeting, is not optimal policy in case of more rigid exchange rate regimes.

Although studies about responses of trade balance to exchange rate volatilities have been considered static until 1970s, the entering of J-curve phenomenon in international economics studies lead attention to short-run dynamics response of trade balance to exchange rate volatilities. Moreover, new approach of S-curve have been introduced for investigating short-run effects of real exchange rate volatilities on trade balance in recent decades which can be useful for policy implications. Using a suitable model, this study tries to investigate the existence of J and S curves among Iran and its 16 major trade partners. In tis regards, an auto-regressive distributed lags model have been used to estimate short-run trade balance equation and J-curve and the cross-correlation have been used to investigate S-curve during 1985-2014. The results show that J and S curve phenomenon of bilateral trade balance is confirmed for almost countries. Hence policy makers should apply suitable policies for bilateral exchange rate to minimize losses caused from real exchange rate fluctuations.