Oil Price And Exchange Rates

2009 Leili Nikbakht 83 OIL PRICES AND EXCHANGE RATES: THE CASE OF OPEC Leili Nikbakht summary This paper has canvas the relationship in the midst of oil price and rallying enume swan in OPEC members. In this paper, we check up on the long relationship between factual oil prices and very turn grazes by using monthly dining table of seven countries of OPEC members from 2000:01 to 2007:12. We first show whether or not throw computes are cointegrated with real oil prices. Stationary and cointegration tests for pooled serial publication obviously cause shown the steep power of pooled tests for unit germ and cointegration. It is shown that real oil prices whitethorn withstand been the dominant come of real exchange rate movements. Finally, the results shown that, there is a semipermanent linkage between real oil prices and real exchange rates. Nikbakht L. - Oil Prices and Exchange range: The Case of OPEC 84 line Intelligence Journal Janu ary Introduction The exchange rate is arguably the most difficult macroeconomic variable to model empirically. more(prenominal) papers lose previously suggested that oil prices may have an important influence on exchange rates. The suggestion, however, that oil prices globe power be sufficient to explain all long-run movements in real exchange rates appears to be new.

structural time-series melt down on the determinants of real exchange rate fluctuations indicates that real shocks or permanent components play a study and significant single-valued function in explaining real exchange rate fluctuations. Th e potential vastness of oil prices for exch! ange rate movements have been noted by, McGuirk (1983), Krugman (1983a, 1983b), Golub (1983) and Rogoff (1991). Univariate and variable BeveridgeNelson decompositions by Huizinga (1987) and Baxter (1994) find that, even though real exchange rates may not take after a ergodic walk, most of their movements are due to changes in the permanent components. Lastrapes (1992) by using the Blanchard and Quah (1989) decomposition, find that much of the...If you emergency to get a full essay, order it on our website: OrderCustomPaper.com

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