*Associate Professor of Economics, Department of Economics, The University of Tabriz, Tabriz, Iran
**Assistant Professor of Economics, Department of Economics, The University of Tabriz, Tabriz, Iran
***PhD Student of Economics, Department of Economics, The University of Tabriz, Tabriz, Iran
Online published on 13 May, 2015.
In this paper the effects of the real exchange rate and income on automobile industry export revenue and import spending are examined in Iran from 1992 to 2013. Separate estimates of export revenue and import spending functions prove more revealing than estimates of the trade balance. Vector autoregressions capture dynamic adjustments to exchange rate and income shocks. The results according the separate models indicate that depreciation affects both the export revenue and import spending in short run. As well as that, the effect of home income demonstrates in the import model and the influence of foreign one is not confirmed.
Trade Balance, Real Exchange Rate, Automobile Industry, J-curve, Vector Autoregression
