Evaluating the Existence of the Generalized Marshall-Lerner Condition in Selected Iranian Manufacturing Industries

Document Type : Research Paper

Authors

1 Department of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University

2 Assistant Professor, Faculty of Economics and Political Science, University Of Sahid Beheshti,Tehran, Iran

3 MA in Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, Iran

10.30465/jnet.2025.49149.2148

Abstract

Generally, the exchange rate devaluation policy is one of the common policies of economic policymakers to increase improve in the trade balance. Meanwhile, the implementation of this policy in developing countries, such as Iran, may not be effective due to the dependence of exports on intermediate and capital imports. In this regard and due to the importance of this matter, using the Generalized Marshall-Lerner condition, this study tries to evaluate the effectiveness of the exchange rate devaluation policy in selected manufacturing industries of Iran during the period of 2010-2019 with the panel data method. The results indicate that this condition has not been provided in all the selected manufacturing industries (11 industries), using intermediate imports and intermediate-capital imports. Also, in the examination of the Generalized Marshall-Lerner condition using the import of only intermediate goods and the import of intermediate-capital goods, separately for the selected industries, this condition is observed in none of the selected industries. According to the results, it can be argued that due to the inefficiency of this policy in order to improve the trade balance in all selected manufacturing industries,, it is necessary that the economic policy maker should have necessary attention to implement the devaluation policy.

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History

  • Receive Date: 29 May 2024
  • Revise Date: 04 October 2024
  • Accept Date: 11 December 2024

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