TY - JOUR JF - JSE JO - jemr VL - 3 IS - 7 PY - 2012 Y1 - 2012/3/01 TI - The Effect of Capital Inflow on Real Exchange Rate in Developing Countries TT - اثر جریان ورودی سرمایه بر نرخ ارز حقیقی در کشورهای در حال توسعه N2 -   This study examines the theoretical and empirical aspects of the effect of capital inflow on exchange rate in 14 developing countries for the period 1980-2009. We developed an empirical model to investigate the effects of term of trade, real per capita output and trade openness on real exchange rate using d ynamic and heterogeneous panel and Pool Mean Group (PMG) methods. Estimation results show that various capital inflow channels have different effect on real exchange rate. For non-oil countries, only foreign aid inflow causes exchange rate appreciation in long-run and short-run and creates Dutch disease. In oil exporting countries, oil revenues and foreign direct investment cause exchange rate appreciation and create Dutch disease problems in the long-run. However, an increase in oil revenues in oil exporting countries causes more exchange rate appreciation than an increase in foreign direct investment. SP - 153 EP - 173 AU - Ebrahimi, Sajad AD - University of Tehran KW - Capital inflow KW - Real Exchange Rate KW - Dutch disease KW - dynamic and heterogeneous panel. UR - http://jemr.khu.ac.ir/article-1-188-en.html ER -