Trend Analysis of the Internal Real Exchange Rate (RER) in Iran

Although the theory of the internal RER is well developed, nevertheless, the actual computation of the different versions of the internal RER pose both conceptual and empirical problems especially for developing country including Iran. Necessary data for computing different Indexes of two goods internal RER are collected annually، indeed it can be hardly accessed through using unaggregate data in terms of value added of GDP. Therefore, in developing countries, every production or expenditure base Index of the internal RER may be meaningfully diverges from each other. Computation of production base indexes of the internal RER using production sectoral data for countries is as a measure for controlling expenditure base indexes.