The Impact of Oil-Related Income on the Equilibrium Real Exchange Rate in Syria / Jemma Dridi, Maher Hasan.

Format:

Book

Government document

Author/Creator:

Dridi, Jemma.

Contributor:

Hasan, Maher.

Series:

IMF Working Papers; Working Paper ; No. 2008/196

IMF working paper ; WP/08/196

IMF Working Papers

Language:

English

Subjects (All):

Petroleum industry and trade--Syria--Econometric models.

Petroleum industry and trade.

National income--Syria--Econometric models.

National income.

Foreign exchange rates--Syria--Econometric models.

Foreign exchange rates.

Physical Description:

1 online resource (32 p.)

Edition:

1st ed.

Place of Publication:

Washington, D.C. : International Monetary Fund, 2008.

Language Note:

English

Summary:

This paper examines the impact of oil-related income, among other fundamentals, on the equilibrium real effective exchange rate (ERER) in Syria. After reviewing the evolution of the Syrian multiple exchange rate regime since 1960 and assessing alternative measures for the exchange rate, the paper analyzes the impact of oil-related income on the ERER in the context of a behavioral equilibrium exchange rate model. The analysis concludes that ERER appreciates with higher oil-related income, productivity and net foreign assets, but, at odds with the conventional wisdom, depreciates with higher government expenditures given that an increase in expenditures usually translates into higher imports and weaker current account position. In light of the projected real shocks associated with the depletion of oil and the change in other fundamentals in the context of the ongoing transition to a market economy, a more flexible regime would serve Syria better in the future.

Contents:

Contents; I. Introduction; II. Brief Review of the Literature; III. Exchange System in Syria; A. Exchange System Developments; Figures; 1. Developments of the Official and Free Market Exchange Rates, 1951-2005; B. Which Exchange Rate Should be Used to Measure the Real Effective Exchange Rate?; C. Developments of the Free Market and Weighted Rates; IV. The Role of Oil-Related Income; A. The Concept of Oil-Related Income; 2. Nominal and Real Effective Exchange Rates, 1960-2005; B. The Impact of Oil-Related Income on the Balance of Payments and the Budget; Boxes; 1. Oil-Related Income in Syria

3. Share of Oil-Related Revenues in Total Foreign Exchange Earnings, and Balance of Payments Developments, 1960-2005V. Theoretical Determinants of the Equilibrium Real Exchange Rate and Estimation Results; A. Theoretical Determinants of the Equilibrium Real Exchange Rate; 4. Share of the Oil-Related Revenues in Total Foreign Exchange Earnings and Fiscal Developments, 1960-2005; B. Estimation Results and Data Issues; 5. Real Effective Exchange Rate and its Theoretical Determinants, 1960-2005; Tables; 1. Unit Root Tests; 2. Multivariate Cointegration Test Results

3. Long-Term Coefficient From Vector Error Correction Model Estimates Using the Free Market Rate6. Government Expenditure and Imports, 1961-2005; 7. REERF, Smoothed and Unsmoothed ERER, and Misalignment, 1960-2005; VI. Conclusions; 8. External Sustainability Assessment; References; Appendixes; I. Exchange System Developments in Syria; II. Detailed ECM Results

Notes:

Description based upon print version of record.

Includes bibliographical references.

Description based on online resource; title from PDF title page (ebrary, viewed February 26, 2014).

ISBN:

9786612841477

9781462322497

1462322492

9781452764214

1452764212

9781282841475

1282841475

9781451870541

145187054X

OCLC:

762054997