The monetary OVERSHOOTING of EXCHANGE RATE is an abnormal behavior of EXCHANGE RATE .This phenomenon occurs when the EXCHANGE RATE overshoots to a level higher than its long run level, due to an unexpected monetary expansion and the slowness of adjustment of goods market compared to the asset market. In view of the importance and multiplicity of implementation of monetary policies in any country and Iran in particular, this phenomenon may be of a crucial significance. The results drawn from this research suggests that the OVERSHOOTING happens only in the short run (i.e. monthly) models. No more this will happen if we apply the seasonal data in the model. This shows that price adjustment is too fast which leads to adjustment of goods market immediately after the adjustment of asset market, in the wake of a monetary expansion. This may result from factors such as .high inflationary expectations of economic factors, the uncertainty prevailing on the EXCHANGE RATE market, government intervention, and etc.

The effectiveness of monetary shocks on EXCHANGE RATE fluctuations in the context of OVERSHOOTING theory is one of the most important subjects in macroeconomic. Since the economy of Iran after revolution years has exposed to monetary base expansion; so' examination of the relation between expansionary monetary policy and EXCHANGE RATE fluctuations and then the role of increasing the degree of floating EXCHANGE RATE with increasing of this fluctuation, is the principal purpose of this research. Therefore, in the first section of the research, the effectiveness of a monetary shock on EXCHANGE RATE during the period of 1370-1386 has examined. In the OVERSHOOTING EXCHANGE RATE models form was seen, after a monetary shock, EXCHANGE RATE shoots over the long run level and in the long run, is adjusted and stands in the level that is over the early level. In the second section research, after the prediction of the EXCHANGE RATE market by the neural networks, it was seen, by increase the degree of floating EXCHANGE RATE, the scope of EXCHANGE RATE OVERSHOOTING increases.

1- INTRODUCTION The effect of monetary policy on the EXCHANGE RATE in the Dornbusch’s point of view is that unpredictable changes in the money supply play a major role in EXCHANGE RATE fluctuations. In a fixed EXCHANGE RATE system, keeping the country's currency stable against foreign currency stabilizes a country's currency and provides grounds for increasing the credibility of policy makers; at the same time, the floating currency system provides the basis for removing the effects of external shocks from the economy. In addition, the use of a fixed EXCHANGE RATE system has reduced the uncertainty of the real sectors of the economy, and this issue can improve international trade and domestic investment. However, the use of a floating EXCHANGE RATE system can lead to the independence of monetary policy in the face of shocks and can be considered as a tool to stabilize the economy in times of business cycles.   2- THEORETICAL FRAMEWORK The theory of EXCHANGE RATE OVERSHOOTING was proposed for the first time by Dornbusch in 1976. If the economy is continuously exposed to unexpected monetary expansion, the EXCHANGE RATE will exceed its long-term trend in the short term and return to its long-term level in the long term. The OVERSHOOTING in the EXCHANGE RATE is a short-term phenomenon that is formed due to the price sticky in the short term and the high adjustment speed in the financial market and the slow adjustment in the real sector of the economy. The dominant core of monetary systems is the use of a "nominal anchor". The nominal anchor is a variable that is used to achieve the goal of monetary policy, and the purpose of its authority is to adjust inflationary expectations and commit the monetary authorities to achieve the declared goals. The innovation of the present study compared to the previous studies is the use of a dynamic approach as well as the examination of the EXCHANGE RATE jump in the conditions of a stable and floating EXCHANGE RATE system, which has been less considered in previous studies.   3- METHODOLOGY The purpose of this paper is to investigate the relationship between monetary policy and EXCHANGE RATE OVERSHOOTING in the Iranian economy. In order to test the experimental model of the research, the data of the period 1989-2020 based on the frequency of seasonal data and the generalized moment method (GMM) were used. Based on this, in the form of two stable and floating EXCHANGE systems, the RATE of jump and deviation in the EXCHANGE RATE has been calculated by using the Hodrick-Prescott filter and the effect of monetary policy and macro variables on the EXCHANGE RATE OVERSHOOTING has been calculated.   4- RESULTS & DISCUSSION The results showed that the monetary policy leads to an OVERSHOOTING in the EXCHANGE RATE and creating a deviation in the EXCHANGE RATE, and this issue has been more severe in the floating EXCHANGE RATE system compared to the fixed EXCHANGE RATE system. Also, the results showed that the production gap had a significant effect on reducing the deviation of the real EXCHANGE RATE. On the other hand, based on the estimated coefficient, it was observed that the deviation of the inflation RATE leads to an increasingly deviation of the real EXCHANGE RATE.   5- CONCLUSIONS & SUGGESTIONS Since the relationship between monetary policy and EXCHANGE RATE is positive, with an expansionary monetary policy, the EXCHANGE RATE increases, which means the value of the national currency decreases. Therefore, in order to reduce the negative effects of monetary policy on the value of the national currency, it is suggested that appropriate policies and executive tools be designed and implemented by the government so that with proper management, it can be placed on the path of economic activities in the society. There is a need for monetary policy stability, which itself requires the existence of an independent central bank.

Because of emphasis of EXCHANGE RATE in macro variable of agriculture sector, EXCHANGE RATE OVERSHOOTING has Survey on the employment in the agriculture section. The time series data used of 1978- 2011 in this study. So, Mundell-Fleming and Dornbush Model used for analysis of EXCHANGE RATE. After survey the EXCHANGE RATE, estimated Real EXCHANGE RATE by Vector Auto Regression model (VAR). Then EXCHANGE RATE OVERSHOOTING calculated with difference of real EXCHANGE RATE and residual. In the second step, EXCHANGE RATE OVERSHOOTING analyzed on the employment of agriculture section by Auto Regressive Distributed lag model (ARDL). The result show, EXCHANGE RATE OVERSHOOTING has important and negative efficacy on the employment of agriculture, capital has positive effect on depend variable. Those shows are natural and expected in the in the economy of Iran. Also Error Correction Model show 29 percent adjustment in each term and will going to near the long-run.

IF the economy is exposed to Continuous and unexpected Expansionary Monetary Policy, the EXCHANGE RATE will exceed its long-run value in the short run and returns to that level again in the long-run, This is a short-run phenomenon, Stem from a lack of uniform of Adjustment speed in commodity and asset markets. Considering the destructive and harmful effects of EXCHANGE RATE OVERSHOOTING in the economy. In this study, the causes of the formation and effective factors on EXCHANGE RATE OVERSHOOTING of Iran & Organization for Economic Co-operation and Development countries using annual time series data for mentioned countries according to published statistics of World Bank, IMF and Federal Reserve by pooled model in the period 1990-2016 were investigated. Among the factors affecting EXCHANGE RATE OVERSHOOTING, there are variables of balance of payment, fiscal policy (government expenditures), monetary shock and oil shock which are examined in detail. In order to estimate effect of oil shock in countries surveyed, using dummy variable, the oil exporting and importing countries are divided. The results indicate a positive and significant effect of variables of fiscal policy (government expenditure), monetary shock expectations, oil shock in oil importing countries and a negative and significant effect of oil shock in oil exporting countries and balance of payments. That means, more government expenses, balance of payments deficit, monetary shock expectations and oil shock in oil importing countries will make EXCHANGE RATE to overshoot or money depreciation of the country's national currency. While, oil price shock in oil exporting countries decreases EXCHANGE RATE OVERSHOOTING or money appreciation of the country's national currency which sign of all coefficients are fully justified according to theoretical basis of the economy.

The EXCHANGE RATE OVERSHOOTING, which results from the monetary disruptions, has negative impact on production and investment in the main economic activities and de-stabilizes the whole economy because of their input-output linkages. Therefore, identifying the causes of economic instability can help to adopt appropriate policies and to create economic stability in the country. The main question is to what extent the EXCHANGE RATE can cause instability in the economy. To answer this question, first, the EXCHANGE RATE OVERSHOOTING was calculated using the Hodrick-Prescott filtering method during 1989-2012. Then, it was introduced into the model by specifying the generalized Solow production function, and finally, the production function was estimated for the main activities of the economy using the panel data technique. The results show that the impact of the EXCHANGE RATE OVERSHOOTING on the major economic activities is negative.

The employment and access to job is one of the most basic needs of a community so that the increase in employment is seen as one of the indicators of development in societies. Given the importance of the issue, the aim of this study is to evaluate the effect of EXCHANGE RATE OVERSHOOTING on employment in agriculture, industry and service sectors in Iran during 1973- 2011 using the seemingly unrelated regression and vector error correction model. The results of vector error correction model indicate that due to expansion in money supply EXCHANGE RATE increases and divergence from equilibrium path occurs which finally leads to adjustment in the long run. Also, the results of seemingly unrelated regression model show that employment in industry and service sectors is respectively negatively and positively affected by EXCHANGE RATE OVERSHOOTING, yet the impact of this OVERSHOOTING on employment in agriculture sector is not significant. In this regard, the demand of labor in the industry sector compared to service and agriculture sectors was the most sensitive to EXCHANGE RATE OVERSHOOTING. In addition, capital stock in industry and service sectors has a positive impact on employment in each sector.

The purpose this study is to estimate the effect of EXCHANGE RATE OVERSHOOTING and vehicle currency on Iran's trade with the Caspian Basin countries based on data from1995-2018and using the Panel Star soft threshold (PSTR) approach. The results of the model estimate show; The variables of GDP per capita, trade agreement, population, distance between the capital and the common border have a positive effect and the variables of central bank intervention, carrier currency and EXCHANGE RATE jumps have a negative effect on Iran's trade volume with Caspian countries. Artificial pricing of the EXCHANGE RATE in the years before the crisis and preventing its adjustment in accordance with economic conditions is one of the main reasons for the recent currency crisis in the country. Also, the calculation of the foreign EXCHANGE market pressure index and central bank interventions indicate that the highest numbers obtained for this index are related to the time when the gap between the free EXCHANGE RATE and the official EXCHANGE RATE has widened. the country's international competitiveness. Creating economic security and a safe environment for investment, expanding and diversifying markets and financial institutions, moving to an open economy and trade agreements, and using foreign investment and changing capital market regulations to increase transparency and stability to increase savings And investment can provide the basis for increasing the country's exports.

The purpose this study is to estimate the effect of EXCHANGE RATE OVERSHOOTING and vehicle currency on Iran's trade with the Caspian Basin countries based on data from1995-2018and using the Panel Star soft threshold (PSTR) approach. The results of the model estimate show; The variables of GDP per capita, trade agreement, population, distance between the capital and the common border have a positive effect and the variables of central bank intervention, carrier currency and EXCHANGE RATE jumps have a negative effect on Iran's trade volume with Caspian countries. Artificial pricing of the EXCHANGE RATE in the years before the crisis and preventing its adjustment in accordance with economic conditions is one of the main reasons for the recent currency crisis in the country. Also, the calculation of the foreign EXCHANGE market pressure index and central bank interventions indicate that the highest numbers obtained for this index are related to the time when the gap between the free EXCHANGE RATE and the official EXCHANGE RATE has widened. the country's international competitiveness. Creating economic security and a safe environment for investment, expanding and diversifying markets and financial institutions, moving to an open economy and trade agreements, and using foreign investment and changing capital market regulations to increase transparency and stability to increase savings And investment can provide the basis for increasing the country's exports.

The purpose of this study is to investigate the effect of EXCHANGE RATE OVERSHOOTING and central bank intervention on Iran's trade with the Caspian Basin countries based on data from 1995-2019 and using the Panel Star soft threshold (PSTR) approach. The results of the model estimate show; The variables of GDP per capita, trade agreement, population, distance between the capital, the border and common language have a positive effect and the variables of central bank intervention and EXCHANGE RATE OVERSHOOTING have a negative effect on Iran's trade volume with Caspian countries. Artificial pricing of the EXCHANGE RATE in the years before the crisis and preventing its adjustment in accordance with economic conditions is one of the main reasons for the recent currency crisis in the country. In addition, the calculation of the foreign EXCHANGE market pressure index and central bank interventions indicate that the highest numbers obtained for this index are related to the time when the gap between the free EXCHANGE RATE and the official EXCHANGE RATE has widened. the expanding and diversifying markets and financial institutions, moving to an open economy and trade agreements, and using foreign investment and changing capital market regulations to increase transparency and stability to increase savings And investment can provide the basis for increasing the country's exports..