The Effects of Oil Price Shocks on real GDP in Iran
Mohammad Taghi Khosravi Larijani (),
Abbas Rezazadeh Karsalari () and
Mehdi Aghaee ()
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Mohammad Taghi Khosravi Larijani: Department of Management, Islamic Azad University Jouybar branch, Jouybar, Iran
Abbas Rezazadeh Karsalari: Department of Management, Islamic Azad University Tafresh branch, Tafresh, Iran
Mehdi Aghaee: Department of Management, Islamic Azad University Tafresh branch, Tafresh, Iran
Hyperion Economic Journal, 2013, vol. 1, issue 3, pages 18-29
In this paper, the asymmetric effects of oil price shocks on GDP have been investigated by co-integration analysis in Iran economy during the period 1960-2010. We used Hodrick-Prescott filtering to separate positive shocks from negative shocks. The results showed that in long run the negative shocks have stronger effects on output than positive ones that can have damaging repercussions on economic growth. The findings have practical policy implications for decision makers in the area of macroeconomic planning. The use of stabilization and savings funds and diversification of the real sector seems crucial to minimize the harmful effects of oil booms and busts.
Keywords: lead; real GDP; Iran economy; asymmetric effects; oil price shocks; Johansen cointegration test (search for similar items in EconPapers)
JEL-codes: C13 C22 E31 (search for similar items in EconPapers)
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Persistent link: http://EconPapers.repec.org/RePEc:hyp:journl:v:1:y:2013:i:3:p:18-29
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