Recognizing the Impact of Fluctuations in Foreign Exchange Rates and Interest Rates on the Index of Economic Freedom in Iran

Agricultural Marketing and Commercialization Journal

مقاله 5، دوره 7، شماره 2، اسفند 2023، صفحه 81-96   

نوع مقاله: Original Research

نویسندگان

marjan meymandi¹؛ somayeh shokravi^{* 2}؛ Akbar Bagheri³

¹Department of Management and Accounting . Islamshahr Branch. Islamic Azad University . tehran . iran

²Department of Management and Accounting, Islamshahr Branch, Islamic Azad University, Tehran, Iran

³Department of Economics Islamic Azad University, Islamshahr branch, Islamshahr, Iran

چکیده

This study aimed to recognize the impact of fluctuations in foreign exchange rates and interest rates on the index of economic freedom in Iran. The research method was practical and descriptive-analytical. The vector auto regression model was used for examining the research model and the Johansen- Juselius procedure was applied for determining the coefficients in the long-run situation. The statistical sample was related to macroeconomic variables and the index of economic freedom in Iran between1996-2019. Fluctuations of the real foreign exchange rate (RER) and real interest rate (RIR) were the independent variables of the study. The dependent variable was the economic freedom index (EFI). Financial development (FIN) and foreign direct investment (FDI) were the control variables. The data were analyzed using Eviews 10 and Excel 2016. The results indicated that fluctuations in the foreign exchange rates and interest rates have a significant impact on the economic freedom index of the country; i.e. as instabilities increase in the economic sections of the country, the economic freedom index decreases.

کلیدواژه‌ها

Economic Freedom Index؛ Fluctuations؛ Foreign Exchange Rates؛ Interest Rates

مراجع

• Asgari, M. & Tofighi, H. (2012). Identification of Effective Factors on Real Exchange Rate Misalignment and Its Impact on Economic Growth in Iran. Economics Research, 9(2), pp. 223-246.
• Halafi, H. (2007). The Real Foreign Exchange Rate and Economic Growth in Iran, Journal of Economic Studies, 79, pp. 57-59.
• Hassanpour Kashani, E. & R. Al-Emran (2020) The Impact of Fluctuations in the Foreign Exchange Rates and Interest Rates on Economic Freedom in Selected Islamic Countries, The Third Conference on the Studies of Economic Management and Industry Oriented Accounting, Tehran.
• Hosseinpoua, A. (2010) Assessing the Equilibrium Real Foreign Exchange Rates: A Study of Equilibrium and Imbalance in the Foreign Exchange Rates, The MA Thesis, Institute for Management and Planning Studies.
• Hosseini, M., Y. Ashrafi & A. Siyami (2011) The Review of Relationship between Financial Development and Economic Growth with Introducing New Variables. Economic Research and Policies, 19(60), pp. 16-34.
• Mehrara, M. & A. Sarkhosh. (2011). Nonlinear Effects of Macroeconomic Variables on Economic Activities with Emphasis on the Exchange Rate (The Case of Iran), Journal of Economic Research, 45(4), pp. 201-228.   
• Pourshahabi, F. & M. Esfandiari. (2017). The Role of Financial Development in the Arrival of Foreign Direct Investment and Promotion of Economic Growth, Economic Growth and Development Research, 7(28), pp. 113-126.
• Salahmanesh, A., S. A. Arman & R. Alaei (2021) Examining the Effect of Economic Freedom in Financial Development, Quarterly Journal of Quantitative Economics, 3(18), pp. 65-98.
• Taiebnia, A. & M. Fouladi (2010) The Effects of Increases in World Prices on Domestic Price Level, Current Account and Exchange Rate, A CGE Model Approach, Journal of Economic Research, 89, pp. 157-184.
• Valian, H., M. Abdoli, & M. Kabusi (2013) A Study of the Relationship between Interest Rate and Foreign Exchange Rate based on the Theory of Fischer International Effect in Iran's Economy, Financial Economics (Financial Economics and Development), 7(22), pp. 91-114.
• Yavari, K. (2005). The Effect of Commercial and Exchange Rate Policies on Iran's Industry Section, Institute for Commercial Studies and Research, pp. 117-123.
• Akpan, E, Nwosu, G, Eweke, 2017, Causality between Non-Oil Export, Financial Sector Development and Economic Growth: Evidence from Nigeria, Journal of Mathematical Finance, 7, 39-53.
• Chaiechi, Taha (2012), Financial Development and Economic Growth through a Post-Keynesian Lens: Hong Kong Case Study, Employment, Growth and Development. A Post-Keynesian Approach, PP: 198- 209.
• Ciftci, C., & Durusu, D. (2021). Economic freedom, foreign direct investment, and economic growth: The role of sub-components of freedom. The Journal of International Trade & Economic Development, 1-22.
• Durusu-Ciftci  et al, (2016). Financial development and economic growth: Some theory and more evidence, Journal of Policy Modeling, Available online 20 August 2016.
• Franklin Roosevelt's Annual Address to Congress – The "Four Freedoms"". January 6, 1941. Archived from the original on May 29, 2008.
• Goodhart, C.A.E. (January 2013). "The Potential Instruments of Monetary Policy" (PDF). Financial Markets Group Paper (Special Paper 219). London School of Economics. 9-10. ISSN1359-9151. Retrieved 13 April 2013
• Kia, A (2013), "Determinants of the real exchange rate in a small open economy: Evidence from Canada", Journal of International Financial Markets, Institutions & Money, 23, 136-178.
• Lampas, N. (2015). American Allies in Times of War: The Great Asymmetry by Stéfanie von Hlatky. Oxford: Oxford University Press, 2013.
• Rashid, A, Waqer, S, (2017), Exchange rate fluctuations, firm size, and export behavior: an empirical investigation, Small Bus Econ (2017) 49:609–625.
• Sayari, N., Sari, R., & Hammoudeh, S. (2018). The impact of value added components of GDP and FDI on economic freedom in Europe. Economic Systems, 42(2), 282-294.
• SLESMAN, L., Naseem, N. A. M., & Aldomi, R. F. M. (2019). Economic Freedom, Real Exchange Rates and Economic Growth in Emerging Markets and Developing Countries. International Journal of Economics and Management, 11, 641-659.