Exchange Rate

Financial sanctions have economic consequences for the oil-dependent economies. We examined the impact of financial sanctions on exchange rate fluctuations and macroeconomic variables in Iran. To this end, we employed a new Keynesian DSGE model. The results indicated that with the shock in foreign exchange, production (Y) and imports initially decreased. Oil production has shown a positive reaction initially and a negative reaction in the medium term, and after 7 periods, the effect of the shock has disappeared. The capital stock (K) also decreased initially, and in two periods, it reacted positively. In the tenth period, its effect disappeared, and in the long term, it became partially negative, and its effect disappeared. The inflation rate has decreased initially, and its effect disappeared over time. Consumption decreased, and after five cycles, the reaction became positive and then disappeared. The interest rate increased initially and then decreased, and in the 10th period, the shock effect disappeared. The exchange rate initially decreased and then increased after one period.

Objective: The tourism sector, a significant component of the global service industry, is vital for a nation’s economic development and income generation. Therefore, it is essential to ascertain the factors influencing the demand for this type of service. The main aim of this study is to examine the impact of exchange rates on tourism demand in Iran. Methods: This study examined the long-term and short-term relationships between Iran’s tourism arrivals and variables such as the exchange rate, political risk, and other factors influencing tourism demand, including inflation, foreign investment, oil revenue, GDP, and population, employing time series data from 1995 to 2024 and the Dynamic ARDL simulation method. Results: The results indicate that political risk significantly detrimentally affects Iran’s tourism demand, whereas the exchange rate has a notable positive influence. Since 2010, when the fourth round of sanctions began, political risk has escalated owing to internal and external conflicts, negatively impacting international tourism demand. Conclusions: The interplay between exchange rate variables and political risk was found to positively influence tourism demand. The increase in the exchange rate decreases the costs of tourism services, and also stimulates creative business endeavors in the tourism industry.

When the economy encounters sudden foreign shocks, the current account is regarded as an important political priority. This paper has studied the effect of share price shocks on the current account in the member states of ECO from 2008-2012. It has tried to answer how the share price shocks affect fluctuations of the current account in the member states of ECO by using scientific methods. By using theValue at Risk(VaR)approach, the results obtained for the current account fluctuations variable revealed that share price, the ratio of the current account balance to GDP, and the nominal interest rate have the greatest effects onthis variable. Furthermore, the least explanatory power in the current account fluctuations pertains to GDP and consumer price variables

Inflation as an undesirable economic phenomenon in recent years has had devastating effects on Iran economy. This made economic researchers devote plenty of reports and researches to the causes or ways to cope with inflation in Iran. In the present study, considering the importance of inflation, it was tried to take advantage of the econometric model to examine the effect of in Iran economy by using annual information from 1974 to 2021 and by using the Generalized Method of Moments (GMM). The results of the GMM model showed that the variables of labor wage index, liquidity volume, time-lag inflation and unofficial exchange rate growth have a positive and significant effect on inflation in Iran. Also, the GDP growth variable has a negative and significant effect on the dependent variable. The study suggests that in order to control inflation, the government in Iran should consider issues such as stability in economic policy-making, adopting appropriate fiscal policies, especially through budgetary discipline, and consistency of monetary and fiscal policies to curb inflation, to be important.

Iranian stock market, as a reflection of the real sector of the country's economy, has experienced many uncertainties and challenges in recent years. One of the macroeconomic factors that vaguely affects stock market is exchange rate, which has a significant volatile pattern with several overshoots during recent years. As a result, analyzing the impact of the exchange rate on stock price has become important as always. Bearing the restrictions on Iran’s trade and spectacular role of exchange rate in Iranian economy along with monetary expansion and fiscal dominance in mind, stock market reacts to exchange rate fluctuations in an asymmetric way. In order to prevent the impact of outliers and parametrical failures, this study seeks to examine the impact of exchange rate fluctuations on the stock price using quantile regression. Based on daily data between 2020/10/12 till 2024/12/20 and using first difference of both stock price logarithm and exchange rate logarithm, it became vivid that the impact of the exchange rate on the stock price is different in estimated quantiles and it is U shaped. Meaning when Stock market is stable and there are no absolute pattern of growth or crash around the median, exchange rate could not explain the stock price significantly. However, if the stock market goes bearish or bullish, quantiles where market is on its lowest or in top two quantiles, exchange rate has a crucial positive impact on the market which complies with evidence in the sample period.