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

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
Table Of 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
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (32 p.)
Specific Material Designation
Form Of Item

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