Fluctuations and instability in key economic variables, including economic growth, productivity, international trade, prices, and government expenditure, can lead to deviations of the real Exchange rate from its equilibrium level. Furthermore, external factors such as multi-rate currency systems and financial sanctions can exacerbate these deviations. These Exchange rate misalignments exert significant impacts on investment, economic growth and development, trade flows, balance of payments equilibrium, optimal resource allocation, and other crucial economic variables and indicators. Given the historical prevalence of Exchange rate fluctuations within the Iranian economy and the profound impact of these deviations on the country's economic performance, this study investigates the determinants of the real Exchange rate and the mechanisms through which deviations arise. Subsequently, it examines the potential impact of Exchange rate policies, specifically Exchange rate unification, on mitigating these deviations from the equilibrium level. To this end, utilizing time series data on key macroeconomic variables spanning the period from 1975 to 2020, an empirical model of real Exchange rate deviation is estimated employing the Vector Autoregression (VAR) method. The empirical findings demonstrate a significant response of Exchange rate deviations to the implementation of Exchange rate policies, particularly through Exchange rate unification or improvements in institutional quality within the specified timeframe. The overall results suggest that an optimal Exchange rate policy, achieved through Exchange rate unification, contributes to dampening real Exchange rate deviations and fostering greater Exchange rate stability.

Nowadays Exchange rate management and eliminating its deviation is one of the main challenges of policy makers in countries such as Iran. Because any abnormal fluctuation and deviation of Exchange rate can affect other economic sectors negatively. This article tried to evaluate Exchange rate misalignment in Iran in context of inflation regimes in favor of reality of results. To do that by applying Markov Switching technique inflationary regimes which have taken place in Iran’ s economy over period of 1990-2017 were extracted and consequently by applying a monetary Exchange rate determination approach nominal Exchange rate misalignment has been calculated. The results imply that in high inflationary regime the absolute value of misalignment is much greater than low inflationary regime. Meanwhile when in low inflationary regime a positive inflation shock on nominal Exchange rate has an increasing but degenerating impact, but in high inflationary regime it leads to a persistent great increase in nominal Exchange rate that continues for ever. These findings could have useful policy implications for authorities.

The effective real Exchange rate is one of the variables that can misalignment from equilibrium values, Performance affects macroeconomic indicators and creates an unstable and uncertain environment in the economy. Therefore, in order to investigate the factors affecting the real effective Exchange rate misalignment in OPEC member countries during the period 1980-1980, first, in the framework of the least dynamic ordinary squares method (DOLS), the effective factors for determining the effective equilibrium effective Exchange rate have been investigated and the results confirm the estimation of the positive effects of oil shocks on the intensification of Exchange rate misalignment. Then, the effect of institutional quality indicators and financial development index on Exchange rate misalignment is investigated using the generalized panel method (GMM). The results of estimation at this stage indicate that the financial development index has a positive impact and institutional quality indicators, including; The stability of the state (rule of law), the ability to account democratically (democracy), social and economic conditions (political rights and civil liberties) have had a significant negative effect on the real effective Exchange rate misalignment. Therefore, programs and policies in the countries under study should focus on improving the quality of market regulation, government accountability for its performance, and ensuring political and economic stability.

In the present article, the researchers try to examine the effect of the real Exchange rate misalignment from the equilibrium path on Iran"s economic growth during the period extending from 1961 to 2001. For this purpose, three measures were utilized: difference between official and parallel Exchange rates, theory of purchasing power parity and structural model for the measurement of index. The results obtained from the experimental studies show that the real Exchange rate misalignment negatively affects Iran economic growth with no lags. Also, the results indicate that the index of real Exchange rate misalignment, based on the theory of purchasing power parity, is more effective than other two measures.

Main objective of this paper is to investigate the impact of Exchange rate misalignment on wheat’s producer estimates (PSE), using the 1989-2007 period’s data. For this purpose, Vector Error Correction Model (VECM) along with the use of real Exchange rate based on purchasing power party (PPP) was applied to estimate nominal equilibrium Exchange rates. Then, by using market price support percentage (MPS%) and producer support estimate percentage (PSE%) measures, impact of Exchange rates misalignment on wheat’s support measures were evaluated. The result of the paper show that specific sector policies had positive impact while, Exchange rates polices counteracted specific sector polices. Meanwhile with approaching the Exchange rates toward its counterpart of the equilibrium Exchange rates, specific - sector polices had a significant effect on MPS% and PSE% of wheat.

Estimating the real Exchange rate misalignment from the equilibrium value and exploring the factors affecting its changes is crucial for both economic policymakers and economic agents. Among the various factors affecting Exchange rate misalignment, the Exchange rate regime, has received less attention in experimental studies. Accordingly, the present paper seeks to find out the answer to the question of how real Exchange rate misalignment is affected by different Exchange rate regimes. In other words, in which of the Exchange rate regimes is the Exchange rate misalignment less and in which one it is higher? To answer the question, the propensity score matching approach has been used. For this purpose, we have used data from 116 developing countries with different Exchange rate regimes in 2019. Other factors such as real Exchange rate misalignment in the previous period, inflation, the quality of institutions and financial development have been considered as match variables to net the effect of the Exchange rate regime on real Exchange rate misalignment and to separate the effects of other variables. The results showed that the real Exchange rate misalignment from its equilibrium level has responded significantly to the type of Exchange rate regime adopted by the countries, so that the floating Exchange rate regime increases the real Exchange rate misalignment in the selected developing countries wherever implemented. It can be argued that factors such as high Exchange rate  fluctuations, a more drastic adjustment in the price level, and speculative bubbles or contagion effects in the floating Exchange rate regime have led to an increase in these misalignments.

this study investigates the short-run and long-run impact of real Exchange rate misalignment and volatility on Indonesian export to the US by exploiting the disaggregated data of export volume. The proxy of real Exchange rate misalignment was obtained by estimating the fundamental equilibrium Exchange rate (FEER) model, and the Exchange rate volatility measured by employing the GARCH (1, 1) model. We employed the ARDL bound test approach to check the existence of long-run equilibrium between export volume and the variable under consideration. Both the short-run estimation using the error correction model and the long-run model indicates that half of the commodities are significantly and positively affected by real Exchange rate misalignment. However, only a small number of commodities is significantly affected by the Exchange rate volatility.

Considering the importance of Exchange rate misalignment in investigating agricultural support policies, the impact of Exchange rate misalignment on agricultural producer support estimates was studied. In this study, first, real Exchange rate was calculated by using an Autoregressive Distributed Lag model (ARDL) and then long-run equilibrium Exchange rate and the amount of misalignment were determined. Moreover, market price support index and producer support estimates were calculated for selected crops (wheat, barley, corn, rice and dates) using nominal and equilibrium Exchange rates. The impact of Exchange rate misalignment on these indices was also estimated. The equilibrium Exchange rate was estimated over 1973-2007 period and producer support estimates was calculated for period of 2002-2006. The results showed that agricultural support levels were highly sensitive to alternative Exchange rate assumptions. Exchange rate misalignment showed support for agricultural producers less than its actual value during the selected period (2002-2006). In addition, the impact of generalization of calculated PSE for selected products to the total agricultural production was in proportion to the share of selected commodities in the total value of agricultural production.

One of the most essential ways to develop oil-based economies is to develop and enable non-oil exports. In this regard, steel industry among the other noticeable industries can performs a vital role. Despite the numerous studies on the non-oil export function and its determinants, the steel industry has not been specifically taken into consideration. This study examines the effect of real Exchange rate misalignment on the steel industry exports from 1992 to 2012. For this purpose, Mobarakeh Steel Corporation has been selected among the Iranian steel companies. In this study steel exports has been considered as a function of three variables: real variable Exchange rate, Exchange rate misalignment and steel production. The two variables, real Exchange rate and Exchange rate misalignment, have been estimated by using the theory of purchasing power parity and ARDL technique has been applied to estimate this model.The results of this study indicate that the steel export is mainly dependent on Exchange rate variables. However, although steel production variable has a positive effect on export, this effect is not significant. Results suggest that, in order to increase steel export, the Exchange rate misalignment should be decreased and gradually be eliminated.