The Effects of Exchange Rate Shocks of Iran’s Trading Partners on the Export of Petrochemical Products

Document Type : Research Paper

Authors

1 Graduated from the field of economic sciences, majoring in energy, Faculty of Social Sciences and Economics, AlZahra University, Tehran, Iran

2 Associate Professor, Department of Economics, Faculty of Social Sciences and Economics, AlZahra University, Tehran, Iran

3 Instructor, Department of Economics, Faculty of Social Sciences and Economics, AlZahra University, Tehran, Iran

10.22051/ieda.2024.44957.1370

Abstract

Many researchers believe that increasing exports leads to economic growth. Several factors affect non-oil exports; the most important is the exchange rate variable. Iran's economy is related to the world economy and is affected by the currency shocks of major economies, including the United States. In this article, the spillover effects of foreign exchange shocks of Iran's trading partners on the exports of petrochemical products have been investigated through the Global Vector Autoregression (GVAR) approach using seasonal data between 1995 and 2020. By introducing a positive US currency shock to the countries, the estimation results and bootstraps show that the US exports have increased and had a spillover effect on the exports of other countries and their increase, which indicates the strengthening of the dollar against all the currencies of these countries. On the other hand, considering that the exports of America's trading partners, including China, to the United States are increasing, and China has a direct relationship with Iran, increasing its demand from Iran will increase the volume of the country's exports. However, the currency shock of China and the European Union does not affect the country's exports because their currency is weakened and cannot affect the global economy

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منابع
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Iranian Economic Development Analyses
Volume 9, Issue 2 - Serial Number 24
October 2023
Pages 101-120

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