Rouollah abedkhani; Seyed Nematollah mousavi; Sharareh Majdzadeh Tabatabai
Abstract
Oil revenues and taxes, respectively, are the first and second sources of government revenues in Iran's economy, with changes in their volume having significant effects on production, employment and ultimately, economic growth, which are the major objectives of the economy. The purpose of this paper ...
Read More
Oil revenues and taxes, respectively, are the first and second sources of government revenues in Iran's economy, with changes in their volume having significant effects on production, employment and ultimately, economic growth, which are the major objectives of the economy. The purpose of this paper was to assess the effects of tax shock on macroeconomic variables in an oil economy with the DSGE model approach. Estimation of model parameters was performed using seasonal adjustment time series data for the period of 1989 to 2017. The results indicate that a short-term tax shock has a negative effect on macroeconomic variables such as economic growth and consumption, but in the long run, with an increase in tax revenue, GDP growth and, consequently, consumption and investment in the economy have increased. In addition, the results reflect the fact that the effect of oil revenues alone on economic growth is positive, but with the introduction of explanatory variables, the amount of capital accumulation, due to the effect of oil revenues on this variable (effective mechanisms), has been negative.
