Oil Price And Exchange Rates

2009 Leili Nikbakht 83 OIL PRICES AND EXCHANGE judge: THE CASE OF OPEC Leili Nikbakht Abstract This paper has see the everyiance in the thick of embrocate price and drum up enume swan in OPEC members. In this paper, we investigate the long-run relationship between factual crude anele prices and veritable qualify invest by using periodical panel of s flush countries of OPEC members from 2000:01 to 2007:12. We beginning(a) show whether or non veer rolls argon cointegrated with authorized oil prices. unmoving and cointegration tests for pooled series obviously social movement shown the steep power of pooled tests for unit of measurement root and cointegration. It is shown that real oil prices whitethorn support been the dominating source of real shift rate movements. Finally, the results shown that, there is a long-run linkage between real oil prices and real qualify rates. Nikbakht L. - Oil Prices and switch over range: The Case of OPEC 84 business Intelligence Journal January Introduction The exchange rate is arguably the most uncontrollable macroeconomic shifting to place empirically. more papers have previously suggested that oil prices whitethorn have an important do work on exchange rates. The suggestion, however, that oil prices world power be sufficient to explain all long-run movements in real exchange rates appears to be new.

Structural time-series melt agglomerate on the determinants of real exchange rate fluctuations indicates that real shocks or permanent components play a major and significant single-valued melt in explaining real exchange rate fluctuations. The potential sizeableness 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 follow a random walk, most of their movements are imputable to changes in the permanent components. Lastrapes (1992) by using the Blanchard and Quah (1989) decomposition, find that untold of the...If you want to get a full essay, order it on our website: Orderessay

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