Exchange Rate Misalignment in Oil Exporting Countries (OPEC): Focusing on Iran

Abstract I n this paper, we investigate the existence and the nature of real exchange rate misalignment in Organization of the Petroleum Exporting Countries (OPEC). To do this we estimated a cross country basic real exchange rate determination model for ۱۹۹۰-۲۰۱۲ and extracted historic trend of misalignment. The results imply that all OPEC countries have had misalignment -of different kinds though- in their real exchange rate. In order to ensure the robustness of results, we also focused on historic trend of real exchange rate misalignment in Iran, which was derived by model, and observed considerable consistency with realities of policy making and economic performances in Iran. This indicated the compatibility of the estimation results with countries’ actual events.

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Keywords: Misalignment , Real Exchange Rate , OPEC Countries , Iran , Oil. JEL Classification: O۲۴ , F۳۱ , O۵۷