Capturing Effect of Exchange Rates on Exports: (A Case Developing Economy)
Asad Saleem Malik, Raza Hassan, Syed Asim Shah, Abdul Ghafoor

Abstract
The paper recapitulates the current theory of capturing effect of exchange rates on exports, besides looking into what determines exchange rate itself. The paper investigates the relationship between exchange rates and exports in Pakistan, using time series analysis and annual data from 1981 - 2010. The structural equation model is used to find out the relations of the variables in the model with help of the regression equations. The empirical results indicate that exchange rates have significant effect on exports. The results imply that exchange rates are important for exports. Imports, exports and foreign direct investment first individually estimated than used the estimated values in main equation of the study.

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