Impact of Real Exchange Rate Changes on Value Added of Manufacturing Subsectors in Iran

Document Type : Research Paper

Authors

1 Assistant Professor of Economics, University of Mazandaran

2 Assistant Professor of Economics, University of Ayatollah Boroojerdi

Abstract

Real exchange rate is one of the most important macroeconomic variables which affects various economic sectors. As the effect of real exchange rate variation is not equal in different sectors and due to importance of industrial development in economic development of country, this paper have investigated the effect of real exchange rate changes on  8 manufacturing subsectors over the period 1353-1390. The structural time series approach has been used in this paper. The results show that exchange rate devaluation has different long run effects on subsectors of manufactories. So that, those manufactories which had dependence on import of inputs and foreign capital goods benefited and those manufactories with lower dependence on foreign inputs destroyed.

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History

  • Receive Date: 28 April 2013
  • Revise Date: 12 October 2014
  • Accept Date: 03 June 2014

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