A general equilibrium analysis of the inflationary impact of energy subsidies reform in Iran
AbstractIran 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.
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Bibliographic InfoPaper 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:
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 (MENA - Middle East & North Africa)
- NEP-ENE-2012-03-08 (Energy Economics)
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