HA145 : Assess the impact of exchange rate fluctuations on the balance of payments: System Dynamics Approach
Thesis > Central Library of Shahrood University > Industrial Engineering & Management > MSc > 2016
Authors:
Ali Momeni Zarea [Author], Mohammad Ali Molaei[Supervisor]
Abstarct: According to the country's economic conditions and real exchange rate fluctuations, this research pointed to one of the important economic targets that is reaching to dynamic growth, within the frxamework of the system for continuous adjustment to currency exchange rate in line with the realization of this goal. In this study, we followed that with the use of the system dynamics approach to examine the effects of exchange rate fluctuations reducing solutions on current account, national production and inflation rates in the long-term period. The General model formed by three models of commodity markets and services, money market and foreign exchange market. By reviewing the data during the period of 1991-2013 for a 20 year period (2011-2031) model results are simulated. According to the results of the implementation of the model, the managed floating currency system are suggested and for avoiding significant increase in exchange rate- to cover the difference of our domestic inflation rates relative to the rate of global inflation-monetary and financial policies of the Government should be reduced inflation to less than 10% and sustained it. So we expect by weakening of the exchange rate, current account and GDP improved compared with fixed formal exchange rate. Also results of simulation model shows that inflation rate in condition of weakening of the exchange rate be less than when it's fixed.
Keywords:
#Exchange rate #Balance of payments #GDP #Inflation #System Dynamics Link
Keeping place: Central Library of Shahrood University
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