s
Abbas memarzadeh
Abstract
In this study, by considering the asymmetric response of the aggregate and sector-level value-added to the positive and negative oil rent shocks, a new insight into the oil curse hypothesis is provided for the case of Iran. Using annual data from 1988 to 2022 and an NARDL model, the findings indicate ...
Read More
In this study, by considering the asymmetric response of the aggregate and sector-level value-added to the positive and negative oil rent shocks, a new insight into the oil curse hypothesis is provided for the case of Iran. Using annual data from 1988 to 2022 and an NARDL model, the findings indicate the aggregate growth shows asymmetric reaction to positive and negative oil rent shocks just in the long run. Although this asymmetry is also confirmed for sector-level growth, the instinct of that varies significantly among them. Our analysis supports the oil curse hypothesis in Iran, and this curse channels via Dutch Disease mechanism in the manufacturing sector. So, even though diversification remains a key policy agenda to decrease the level of oil rent dependence, policymakers should consider the harmful impact of oil rent decrease on the growth of certain economic sectors. Therefore, the effectiveness of any diversification policy mainly depends on whether policy makers have a full understanding of the heterogeneous response of economic sectors to crude oil rent shocks.
s
hamzeh Karimi Firouzjaei; 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 ...
Read More
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 durati on 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.
