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Oil Revenues, Economic Growth and Resource Curse in Iran Economy

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  • Mohsen Mehrara
  • Abbas Rezazadeh Karsalari

Abstract

This paper explores the relation between oil revenues and economic growth in Iran using annual data for the period 1959-2008 to check whether this relation has a structural breakpoint effect. The results indicate the threshold level of growth rate of oil revenues above which oil revenues significantly slows growth is around 22% percent for Iran economy. In contrast, linear estimation without any allowance for threshold effects would misleadingly have us believe that an increase in the oil revenues increase the growth rate. Failure to account for nonlinearities conceal the resource curse in these countries particularly during extreme oil booms as suggested in previous studies.

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  • Mohsen Mehrara & Abbas Rezazadeh Karsalari, 2011. "Oil Revenues, Economic Growth and Resource Curse in Iran Economy," Journal of Social and Development Sciences, AMH International, vol. 2(2), pages 73-80.
    • Handle: RePEc:rnd:arjsds:v:2:y:2011:i:2:p:73-80
    DOI: 10.22610/jsds.v2i2.655
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