s
hamzeh karimi; Saeed Karimi Potanlar; Ahmad Jafari Samimi
Abstract
considering the importance of oil shocks in Iran's economy, in this research, an attempt has been made to examine the effects of oil income shocks on the expenditure and income components of the government's general budget. in this regard, in order to consider structural instability in parameters, time-varying ...
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considering the importance of oil shocks in Iran's economy, in this research, an attempt has been made to examine the effects of oil income shocks on the expenditure and income components of the government's general budget. in this regard, in order to consider structural instability in parameters, time-varying parameter vector autoregressive (TVP-VAR) models are used. this model allows the estimated coefficients vary over time. in this research, the seasonal data in period of 1990/02-2019/01 be used. the estimation results of the models indicate the positive and short-term effects of oil income shocks on current expenditures and construction expenditures. the estimation of the second model shows the negative impact of oil shocks on tax revenues and the positive impact on other government revenues. the results of reaction functions (IRF) also show that the mentioned effects have a short duration and are reversed in the next periods and disappear quickly. also, the estimation results of the models show that the impact of oil shocks on inflation has varied over time and changed from negative to positive after the income shock of 2005.
Economic Growth
saeed karimi potanlar; ahmad jafari samimi; hamid Hamid La'l-e-Khezri
Abstract
The aim of this article is to analyzing the effect of shocks of fiscal consolidation policy on the macroeconomic variables of Iran. In this regard by using Factor Augmented Vector Auto Regression (FAVAR) method the effect of shocks on government revenues and expenditures on important macroeconomic variables ...
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The aim of this article is to analyzing the effect of shocks of fiscal consolidation policy on the macroeconomic variables of Iran. In this regard by using Factor Augmented Vector Auto Regression (FAVAR) method the effect of shocks on government revenues and expenditures on important macroeconomic variables including total real GDP growth, inflation, private consumption growth and investment growth over the period 1984:1 -2015:4 is investigated. The results of research models show that the effect of fiscal consolidation policy on the macroeconomic variables are different, and it is difficult to provide a same policy tool to effect all variables. Thus with emphasis on real GDP growth which is a major factor that affects other macroeconomic variables, it can be noted that in short term which consists of 4 seasons, reducing public expenditures and increasing government revenues lead to a reduction in production in response to a negative reaction to investment and private consumption and inflation will decrease. Therefore in the short term the suitable policy for fiscal consolidation is a combination of expenditure cut and income rising and in particular, the policy of reducing current expenditure and increasing import taxes. In the medium and long term, respectively consist of 8 and 16 seasons, real GDP growth responses positively to the expenditures cut policy, decline in current expenditures and social public expenditures is introduced as an instrument of fiscal consolidation policy.
