02027cas a2200253 a 4500 AALejournalIMF004816 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451866773 1018-5941 BD-DhAAL BD-DhAAL Kandil, Magda. Exchange Rate Fluctuations and Output in Oil-Producing Countries : The Case of Iran / Magda Kandil, Mohsen Bahmani-Oskooee. Washington, D.C. : International Monetary Fund, 2007. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Conventional wisdom states that currency depreciation in oil-producing countries are contractionary because demand effects, limited by the prevalence of oil exports priced in dollars, are more than offset by adverse supply effects. Iran, however, has experienced a rapid increase in non-oil exports in the last decade. Against this background, the paper tests whether the conventional wisdom still applies to Iran and concludes that the emergence of the non-oil export sector has made currency depreciation expansionary. The expansionary effect is particularly evident with respect to anticipated persistent depreciation in the long-run. Notwithstanding the varying effects of exchange rate fluctuations on the demand and supply sides of the economy, managing a flexible exchange rate gradually over time towards achieving stability in the real effective exchange rate may strike the necessary balance. Mode of access: Internet Bahmani-Oskooee, Mohsen. IMF Working Papers; Working Paper ; No. 2007/113 Full text available on IMF http://elibrary.imf.org/view/journals/001/2007/113/001.2007.issue-113-en.xml IMF e-Library