Analysis Effect of Exchange Rate Overshooting on the Employment of Agriculture section

Document Type : Review Article

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Abstract

Because of emphasis of exchange rate in macro variable of agriculture sector, exchange rate overshooting has Survey on the employment in the agriculture section. The time series data used of 1978- 2011 in this study. So, Mundell-Fleming and Dornbush Model used for analysis of exchange rate. After a survey, the exchange rate estimated Real exchange rate by Vector Auto Regression model (VAR). Then exchange rate overshooting calculated with a difference of real exchange rate and residual. In the second step, exchange rate overshooting analyzed on the employment of agriculture section by Auto Regressive Distributed lag model (ARDL). The result show, exchange rate overshooting has an important and negative effect on the employment of agriculture, capital has a positive effect on depending on the variable. Those shows are natural and expected in the in the economy of Iran. Also, Error Correction Model show 29 percent adjustment in each term and will be going to near the long-run.

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References

Drumond, C. E, Lima T. G. (2014), Exchange Rate Dynamics with Heterogeneous Expectations.
Meerza, S. I. A, (2012). Exchange Rate Determination of Bangladesh:A Cointegration Approach. Journal of Economic Cooperation and Development, (3): 81-96.
Saeed, A; Ullah Awan, R; Sial, M. H; Sher, F. (2012), An Economic Analysis of Determinants of Exchange Rate in Pakistan. International Journal of Business and Social Science, (6):184-196.

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