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Oil income shocks and economic growth in Iran

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  • Emami, Karim
  • Adibpour, Mehdi
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    Abstract

    The aim of this paper is to study the relationship between oil revenue shocks and output growth in Iran by Adopting an SVAR model over the period 1959–2008. The results indicate that positive and negative oil revenue shocks significantly affect output growth positively and negatively respectively and these effects are asymmetric. While negative oil revenue shocks adversely affect the economic growth, the resource curse impedes the expected positive effects of positive oil shocks. In order to overcome the harmful effects of oil booms and busts, the establishment of oil stabilization and saving funds, diversifying economy, delinking government expenditure from oil revenues and introducing fiscal rules into the budget seems crucial for Iran economy.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 29 (2012)
    Issue (Month): 5 ()
    Pages: 1774-1779

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    Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1774-1779

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    Web page: http://www.elsevier.com/locate/inca/30411

    Related research

    Keywords: Oil shocks; Output growth; SVAR;

    References

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    Cited by:
    1. Dreger, Christian & Rahmani, Teymur, 2014. "The Impact of Oil Revenues on the Iranian Economy and the Gulf States," IZA Discussion Papers 8079, Institute for the Study of Labor (IZA).

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