CEU Electronic Theses and Dissertations, 2009
| Author | Huseynov, Elchin Nabi |
|---|---|
| Title | Does increase in oil prices caused overvaluation of national currency? The equilibrium real effective exchange rate and misalignment in Azerbaijan |
| Summary | This research investigates equilibrium exchange rate in one of the main oil exporting country Azerbaijan in order to find out whether the increase of real oil price causes the appreciation real effective exchange rate and to determine whether national currency has become overvalued in the course of oil revenues boom of recent years. We derive the measure of real effective exchange rate and analyze the long-run relationship between real effective exchange rate and its determinants. The monthly data from 1997-2008 has been employed to estimate Error Correction Model. The results confirm strong relationship between real exchange rate and real oil prices and the coefficients of the error correction term indicate the gradual convergence of the exchange rate towards its long-run equilibrium. Though real oil price increases lead to considerable real appreciation of Azeri manat, the national currency is not overvalued, thus bringing support to the regulated exchange rate regime in Azerbaijan |
| Supervisor | Matyas Laszlo |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2009/huseynov_elchin.pdf |
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