This paper investigates the effects of the real exchange rate and its uncertainty on the Value Added of Manufacture Industries in Iran from 1989-2020. After calculating the exchange rate uncertainty by using the GARCH model, the SVAR model has been used to examine how the real exchange rate and its uncertainty relate to the manufacturing value added. The findings show that real exchange rate shocks have a significant and negative effect on the annual growth rate for manufacturing value added. The effect of the real exchange rate shock on the annual growth rate for Value Added of Manufacture Industries is smaller than the effect of the exchange rate uncertainty on the variable. In other words, uncertainty has detrimental effects on the exchange rate level. Exchange rate uncertainty elasticity of manufacturing value added is negative in most manufacturing establishments, indicating that increasing real exchange rate uncertainty decreases the value added in most manufacturing establishments.
Investigation of the effects of real exchange rate uncertainty shocks as a standard deviation on the growth rate for manufacturing value added shows that the real exchange rate uncertainty shocks have a significant and negative effect on the annual growth rate for Value Added of Manufacture Industries except chemical manufacturers, but after 3 periods of shock effect is reduced and damped. The results show that key variables in Iranian manufacturing activities are significantly sensitive to exchange rate policy. Therefore, the appropriate policy seems to be the real exchange rate stabilization.
bashiri, S. and Aziznezhad, S. (2024). Investigating the effects of exchange rate uncertainty on The Iranian Manufacturing Value Added. Majlis and Rahbord, (), -. doi: 10.22034/mr.2024.15364.5529
MLA
bashiri, S. , and Aziznezhad, S. . "Investigating the effects of exchange rate uncertainty on The Iranian Manufacturing Value Added", Majlis and Rahbord, , , 2024, -. doi: 10.22034/mr.2024.15364.5529
HARVARD
bashiri, S., Aziznezhad, S. (2024). 'Investigating the effects of exchange rate uncertainty on The Iranian Manufacturing Value Added', Majlis and Rahbord, (), pp. -. doi: 10.22034/mr.2024.15364.5529
CHICAGO
S. bashiri and S. Aziznezhad, "Investigating the effects of exchange rate uncertainty on The Iranian Manufacturing Value Added," Majlis and Rahbord, (2024): -, doi: 10.22034/mr.2024.15364.5529
VANCOUVER
bashiri, S., Aziznezhad, S. Investigating the effects of exchange rate uncertainty on The Iranian Manufacturing Value Added. Majlis and Rahbord, 2024; (): -. doi: 10.22034/mr.2024.15364.5529
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