This study has investigated the long-run and short-run effects of relative productivity on real exchange rate using annual time series data of Iran and its major trade partners over the period 1980-2005. To analyze such effect which refers to the Balassa-Samuelson effect, this research uses Auto-Regressive Distributed Lags (ARDL) method, to deal with dynamics of the relationship between productivity and real effective exchange rate.
The empirical results indicate a positive and significant effect of relative productivity to the tradable sector on the real effective exchange rate, whereas this effect is significantly negative with respect to the non-tradable sector in Iran. These findings are consistent with the Balassa-Samuelson effect.
JEL Classification: C32; D24; F31
Tayebi,S K and Esmaeili Razi,H . (2012). Effect of Sector Productivity on Iran's Real Effective Exchange Rate (A Test on Balassa-Samuelson Effect). Journal of Economic Research (Tahghighat- E- Eghtesadi), 47(2), 41-60. doi: 10.22059/jte.2012.25009
MLA
Tayebi,S K , and Esmaeili Razi,H . "Effect of Sector Productivity on Iran's Real Effective Exchange Rate (A Test on Balassa-Samuelson Effect)", Journal of Economic Research (Tahghighat- E- Eghtesadi), 47, 2, 2012, 41-60. doi: 10.22059/jte.2012.25009
HARVARD
Tayebi S K, Esmaeili Razi H. (2012). 'Effect of Sector Productivity on Iran's Real Effective Exchange Rate (A Test on Balassa-Samuelson Effect)', Journal of Economic Research (Tahghighat- E- Eghtesadi), 47(2), pp. 41-60. doi: 10.22059/jte.2012.25009
CHICAGO
S K Tayebi and H Esmaeili Razi, "Effect of Sector Productivity on Iran's Real Effective Exchange Rate (A Test on Balassa-Samuelson Effect)," Journal of Economic Research (Tahghighat- E- Eghtesadi), 47 2 (2012): 41-60, doi: 10.22059/jte.2012.25009
VANCOUVER
Tayebi S K, Esmaeili Razi H. Effect of Sector Productivity on Iran's Real Effective Exchange Rate (A Test on Balassa-Samuelson Effect). J. Econ. Res.. 2012;47(2):41-60 (In Persian). doi: 10.22059/jte.2012.25009
