Investigating the Effect of Iran's Oil Revenues Shock on Macroeconomic Variables in the DSGE Model

Iraj Soleymanzad (), Hamid Reza Faaljou () and Hassan Heidari ()
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Iraj Soleymanzad: PhD. Candidate in Economics, Urmia University
Hamid Reza Faaljou: Assistant Professor of Economics, Urmia University
Hassan Heidari: Professor of Economics, Urmia University

Quarterly Journal of Applied Theories of Economics, 2019, vol. 6, issue 1, 149-182

Abstract: The purpose of this study was to investigate the effect of Iran's oil revenues on macroeconomic variables in the form of DSGE model during the period of 1995-2015 in the context of open economy based on the real business cycle pattern, in line with the conditions of the Iranian economy including households, enterprises, government and The monetary authority is the oil sector with an emphasis on the National Development Fund. The results of simulation of the model variables indicate that, due to the positive impetus of oil revenues, production, consumption, investment, government spending under both scenarios increases, but the increase in the direct tax distribution scenario is higher than the base scenario. Also, the greater the share of government-owned oil revenues (50 and 75percent) in households from the current budget, the increase will also be higher in the resources of the National Development Fund. Consequently, the contribution of the Facility to the Private Sector (F) increases. According to the modeling of this study, the increased private sector investment (I_t^pa) also increases, as a result of non-oil production in the country. Therefore, based on the results obtained, the direct tax-deductible distribution policy is recommended as a supplement to the National Development Fund

Keywords: Shock; Financial policy; Oil sector; Investment; DSGE model (search for similar items in EconPapers)
JEL-codes: E12 E27 E52 E62 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ris:qjatoe:0142

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