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Oil income shocks and economic growth in Iran

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  • Emami, Karim
  • Adibpour, Mehdi

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.

Suggested Citation

  • Emami, Karim & Adibpour, Mehdi, 2012. "Oil income shocks and economic growth in Iran," Economic Modelling, Elsevier, vol. 29(5), pages 1774-1779.
  • Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1774-1779 DOI: 10.1016/j.econmod.2012.05.035
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    References listed on IDEAS

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    Cited by:

    1. Christian Dreger & Teymur Rahmani, 2016. "The impact of oil revenues on the Iranian economy and the Gulf states," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 40(1), pages 36-49, March.
    2. repec:ebl:ecbull:eb-17-00234 is not listed on IDEAS
    3. Abbas Ali Abounoori & Rafik Nazarian & Ashkan Amiri, 2014. "Oil Price Pass-Through into Domestic Inflation: The Case of Iran," International Journal of Energy Economics and Policy, Econjournals, vol. 4(4), pages 662-669.

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    Keywords

    Oil shocks; Output growth; SVAR;

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