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The Leverage Effect of Oil Price Shocks on Economic Growth of Iran

Author

Listed:
  • Mohammadreza Nahidi

    (Department of Economics, College of Management, Economics and Accounting, Tabriz Branch, Islamic Azad University, Tabriz, Iran)

  • Arash Ketabforoush Badri

    (Department of Economics, Faculty of Management and Accounting, Qazvin Branch, Islamic Azad University, Qazvin, Iran)

Abstract

Oil prices shocks are one of the main factors affecting economic variables especially economic growth. With this approach, the present study is about studying negative and positive price shocks of oil and the official exchange rate with perspective of leverage effect of shocks on economic growth of Iran. This study tends to consider the leverage effect of oil price on economic growth of Iran using EGARCH method in period 1980 to 2014. The results show that the leverage effect is confirmed and has different effects for each unit of positive and negative shock on economic growth. Also the official exchange rate and light oil price shock has positive and meaningful effect and the shock of heavy oil price has negative and meaningful effect on economic growth.

Suggested Citation

  • Mohammadreza Nahidi & Arash Ketabforoush Badri, 2018. "The Leverage Effect of Oil Price Shocks on Economic Growth of Iran," Noble International Journal of Business and Management Research, Noble Academic Publsiher, vol. 2(7), pages 53-60, July.
    • Handle: RePEc:nap:nijbmr:2018:p:53-60
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    References listed on IDEAS

    as
    1. Ette Harrison Etuk & Alapuye Gbolu Eleki, 2017. "Arima Intervention Analysis of Monthly Xaf-Ngn Exchange Rates Occasioned By Nigerian Economic Recession," Noble International Journal of Economics and Financial Research, Noble Academic Publsiher, vol. 2(4), pages 76-81, April.
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