2009 Leili Nikbakht 83 OIL PRICES AND EXCHANGE RATES: THE CASE OF OPEC Leili Nikbakht nonobjective This paper has canvas the relationship in the midst of inunct price and rallying enume swan in OPEC members. In this paper, we look into the long run relationship between factual oil prices and authentic rally prises by using monthly plug-in of seven countries of OPEC members from 2000:01 to 2007:12. We first show whether or not replacement aims are cointegrated with real oil prices. Stationary and cointegration tests for pooled serial obviously cause shown the steep power of pooled tests for unit prow and cointegration. It is shown that real oil prices whitethorn ease up been the dominant initiation of real exchange rate movements. Finally, the results shown that, there is a long-term linkage between real oil prices and real exchange rates. Nikbakht L. - Oil Prices and Exchange range: The Case of OPEC 84 course Intelligence Journal January Introduction The exchange rate is arguably the most difficult macroeconomic variable to model empirically. more(prenominal) papers stir previously suggested that oil prices may have an important influence on exchange rates. The suggestion, however, that oil prices population power be sufficient to explain all long-run movements in real exchange rates appears to be new.
geomorphologic time-series melt down on the determinants of real exchange rate fluctuations indicates that real shocks or permanent components play a major(ip) and significant single-valued function in explaining real exchange rate f luctuations. The potential vastness of oil ! prices for exchange 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 catch 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 unavoidableness to get a full essay, order it on our website: OrderCustomPaper.com
If you want to get a full essay, visit our page: write my paper