The Impact of Real Exchange Rate Changes on Non-oil Exports of Iran

Setting Exchange rate in a good manner, paying attention to its changes and the factors affecting it in any circumstances, can be a topic of discussion. On the other hand, an increase in non-oil exports has been the main economic policy of the Iranian government in recent decades. To get rid of single-product economy, the development of non-oil exports for the Iranian government is a necessity. Iran's share of global exports has not been dramatic over the past years, and this makes the development of non-oil exports necessary in order to reduce the country's economic dependence on oil revenues. In the present study, by stipulating appropriate model, from econometric method, ARDL model was used to examine the short-term and long-term effects of real exchange rate changes on Iran's non-oil exports during the period 1983-2013. Non-oil exports in this study have been measured using the variables of the real exchange rate, Iran's trading partners GDP, GDP and credit to the private sector. Estimation results suggest that symptoms of estimated coefficients are consistent with the theoretical basis of all variables, and results show that changes in the real exchange rate at level of 5% error in the short and long term have a positive effect on non-oil exports. Effect of Iran's trading partners GDP, GDP and credit to the private sector on non-oil exchange has been positive.