A general equilibrium analysis of the inflationary impact of energy subsidies reform in Iran
Abstract
Iran has suffered ever-increasing domestic energy consumption mostly due to its price controlling policy. If the trend continues, it will become a pure importer in the following decades. To avoid that unlucky fate, Iran started the energy subsidies reform on December 2010. It increased domestic energy and agricultural prices up to 20 times, making it the first major oil-exporting country to reduce substantially implicit energy subsidies. The paper studies the inflationary impact of the energy subsidies reform on different non-energy sectors and urban and rural households in Iran. For this purpose, the input-output price model of Iran is made and energy cross-price elasticities of non-energy sectors are derived. The results evidence the tremendous effects of the complete reform on the production and consumption prices.Download Info
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Paper provided by Hiroshima University, Graduate School for International Development and Cooperation (IDEC) in its series IDEC DP2 Series with number 2-8.Length: 34 pages
Date of creation: Feb 2012
Date of revision:
Handle: RePEc:hir:idecdp:2-8
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Web page: http://www.hiroshima-u.ac.jp/en/idec/
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Related research
Keywords: Energy subsidies reform; Production and consumption prices; Iran; Input-output price model; Decomposition;Find related papers by JEL classification:
- C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-03-08 (Agricultural Economics)
- NEP-ALL-2012-03-08 (All new papers)
- NEP-ARA-2012-03-08 (Arab World)
- NEP-ENE-2012-03-08 (Energy Economics)
References
References listed on IDEASPlease report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hesham AlShehabi, Omar, 2012. "Energy and labour reform: Evidence from Iran," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 441-459.
- Larsen, Bjorn & Shah, Anwar & DEC, 1992. "World fossil fuel subsidies and global carbon emissions," Policy Research Working Paper Series 1002, The World Bank.
- Robert Gillingham & David Locke Newhouse & David Coady & Kangni Kpodar & Moataz El-Said & Paulo A. Medas, 2006. "The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka," IMF Working Papers 06/247, International Monetary Fund.
- Llop Llop, Maria, 2006.
"Economic impacts of alternative water policy scenarios in the Spanish production system: an input-output analysis,"
Working Papers
2072/3681, Universitat Rovira i Virgili, Department of Economics.
- Llop, Maria, 2008. "Economic impact of alternative water policy scenarios in the Spanish production system: An input-output analysis," Ecological Economics, Elsevier, vol. 68(1-2), pages 288-294, December.
- Jesper Jensen & David Tarr, 2003. "Trade, Exchange Rate, and Energy Pricing Reform in Iran: Potentially Large Efficiency Effects and Gains to the Poor," Review of Development Economics, Wiley Blackwell, vol. 7(4), pages 543-562, November.
- Llop, Maria & PiƩ, Laia, 2008. "Input-output analysis of alternative policies implemented on the energy activities: An application for Catalonia," Energy Policy, Elsevier, vol. 36(5), pages 1642-1648, May.
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