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Analyzing of Oil Revenues Shocks Asymmetric Effects on Misery index in Iran Using Vector Error Correction Model

Author

Listed:
  • Khanzadi, Azad

    () (Assistant Professor of Economics, Razi University)

  • Moradi, Sara

    () (M.A. in Economics, Razi University)

  • Heidarian, Maryam

    () (M.A. in Energy Economics, Razi University)

Abstract

Since the major part of oil revenues are control by government and it forms government’s expenditures; therefore, recognition of oil revenues growth shocks and their impacts intensity on macroeconomic variables such as inflation and unemployment is very important for economic policymakers. This study examines the asymmetric effects of oil revenues shocks on misery index in Iran’s economy by using vector error correction method. For this purpose, we use annual macroeconomic data during 1971-2014 periods. The result shows that both positive and negative shocks have a significant and negative effect on misery index and also long-term trend in oil revenues have a positive and significant relationship with misery index. On the other hand, population growth rate, government expenditure and trade openness index as well as influencing variables on misery index in the model were brought that have a positive and significant relationship with misery index. Also according to the Wald test results, the hypothesis of symmetric effects of positive and negative shocks of oil revenues is rejected.

Suggested Citation

  • Khanzadi, Azad & Moradi, Sara & Heidarian, Maryam, 2017. "Analyzing of Oil Revenues Shocks Asymmetric Effects on Misery index in Iran Using Vector Error Correction Model," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 3(4), pages 129-152, February.
  • Handle: RePEc:ris:qjatoe:0061
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    More about this item

    Keywords

    Oil revenues shocks; Resource curse; Asymmetric effects; Misery index; Iran;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts

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