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Real Exchange Rate Misalignment in Azerbaijan

35 Pages Posted: 20 Mar 2011

See all articles by Hasanov Fakhri

Hasanov Fakhri

Qafqaz University - Center for Socio-Economic Research; George Washington University - Research Program on Forecasting; Institute of Cybernetics - Department of Modeling Socio-Economic Processes

Fariz Huseynov

North Dakota State University - College of Business

Date Written: 2009

Abstract

By using quarterly data from 2001-2007 and applying various approaches, we estimate real equilibrium exchange rate misalignment for Azerbaijani Manat (AZN) and find that AZN is slightly overvalued. Purchasing power parity approach does not explain the equilibrium exchange rate. However using behavioral and permanent equilibrium exchange rate approaches, we find that the relative productivity, terms of trade, trade openness, net foreign assets, government expenditures and oil prices are the main determinants of misalignment.

Keywords: Real Effective Exchange rate, Misalignment, Azerbaijani manat

JEL Classification: F31

Suggested Citation

Hasanov, Fakhri and Huseynov, Fariz, Real Exchange Rate Misalignment in Azerbaijan (2009). Available at SSRN: https://ssrn.com/abstract=1788664 or http://dx.doi.org/10.2139/ssrn.1788664

Fakhri Hasanov (Contact Author)

Qafqaz University - Center for Socio-Economic Research ( email )

Baku Sumgait Road 16th km.
Hasan Aliyev Str. 120
Khirdalan, Baku AZ0101
Azerbaijan
+994 (12) 4482862-66 (Phone)
+994 (12) 4482861,67 (Fax)

HOME PAGE: http://www.qu.edu.az/

George Washington University - Research Program on Forecasting ( email )

1922 F Street, NW
Old Main, Suite 208
Washington, DC 20052
United States
(202) 994-6150 (Phone)
(202) 994-6147 (Fax)

HOME PAGE: http://research.columbian.gwu.edu/cer/research/forecasting

Institute of Cybernetics - Department of Modeling Socio-Economic Processes ( email )

9, F. Agayev Str.
Baku, Az1141
Azerbaijan
(994 12) 5390151 (Phone)
(994 12) 5392633 (Fax)

HOME PAGE: http://www.cyber.az/

Fariz Huseynov

North Dakota State University - College of Business ( email )

Department of Acctg, Finance & Information Systems
Fargo, ND 58108
United States
+17012315074 (Phone)

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