Chapter 9 Economic Growth and Economic Policy in Iran: 1950–2003 (original) (raw)
Related papers
Oil Resource Abundance, Economic Growth and Income Distribution in Iran
International Conference on Policy Modeling, Ottawa, …, 2009
Since the first oil shock in 1973, almost the economic performance of Iran has been related to its natural resource wealth. The economy has experienced relatively lower per capita GDP growth and higher income inequality. This may support this hypothesis that natural resources seem to have been more of a curse than a blessing for Iran. This paper aims to analyze the effects of oil resource abundance on two major macroeconomic variables, economic growth and income distribution, in Iran using the data over the period 1968-2005. I take a time series perspective and focus on major forces of economic growth including oil resource. Moreover, the main determinants of income distribution are theoretically specified to examine the effects of oil resource. Due to the problem of data availability, and ARDL approach is employed to estimate the empirical models. Using the production function approach, the results of the study confirm that the overall long run effect of oil abundance on GDP is positive and significant but the value of the estimated coefficient is too small. The findings show that physical capital and human capital have positive and significant effects on GDP in the long run. Moreover, this study finds that oil abundance have negative and significant effect on income distribution. It means that oil revenue improves income equality in Iran. It should be point out that while the Gini coefficient is relatively higher compared to most countries, poverty level are substantially lower because of the distinguished social welfare system in the country and cohesive system of private social responsibility through a religious charitable system. However, income and human capital have a negative and significant effect on income distribution. The overall findings appeared to support this hypothesis that oil abundance is not a blessing for Iran.
Oil, government's budget and economic growth in Iran
International Journal of Economic Policy in Emerging Economies, 2015
Recognition of economic growth determinants is one of the most important concerns for economists. In an oil exporting country, oil revenue plays the significant role for that economy alongside other economic growth determinants. This paper attempts to provide a clear picture of the actual role of oil in the Iranian economy by documentation of stylised facts regarding oil and economic growth. Available evidences suggest that oil revenue has a profound influence on the economy in different layers. Since oil revenue goes directly to public treasury and is expended by the government, it seems that government's management on this revenue would be a determinant for the economy. Accordingly, this paper offers an index, to evaluate this management, as government savings over oil revenue (GSOR). The higher level of GSOR shows the better situation. Finally, findings of a VAR approach including this indicator show that financing government expenditures by non-oil revenue, has positive effects on economic growth.
1980
The main concern of this study was two-fold: (a) to compute the Iranian economy's long-run growth potential consistent with full-capacity utilization of the output and stocks with the existing current and capital account matrices; and (b) to simulate the impacts that changing petroleum export levels have on capital formation, employment, and income distribution. The analysis proceeded by developing a closed dynamic interindustry model in order to compute the "turnpike" growth rate. The uniform or "turnpike" growth rate computed for the base current and capital account matrices was 1.7 percent per annum. This describes the long-run growth potential for Iran. Given the current and capital coefficients matrices and the uniform growth rate, the level of outputs for the planning period were calculated. The necessary investments which would make the 1.7 percent growth rate possible, were also computed. The input/output table, using the 1973 data base for Iran, was ...
Oil income shocks and economic growth in Iran
Economic Modelling, 2012
The aim of this paper is to study the relationship between oil revenue shocks and output growth in Iran by Adopting an SVAR model over the period 1959-2008. The results indicate that positive and negative oil revenue shocks significantly affect output growth positively and negatively respectively and these effects are asymmetric. While negative oil revenue shocks adversely affect the economic growth, the resource curse impedes the expected positive effects of positive oil shocks. In order to overcome the harmful effects of oil booms and busts, the establishment of oil stabilization and saving funds, diversifying economy, delinking government expenditure from oil revenues and introducing fiscal rules into the budget seems crucial for Iran economy.
The effects of oil and non-oil exports on economic growth: a case study of the Iranian economy
Economic Research-Ekonomska Istraživanja, 2014
This study attempts to re-investigate the role of oil and non-oil exports in economic growth in Iran using the multivariate cointegration and Granger causality methods. This study covers the annual data from 1970 to 2008. Throughout this study, our empirical results indicate that the variables are cointegrated and the Granger causality test reveals evidence of uni-directional causality from oil and non-oil exports to economic growth. Therefore, we confirm that the export-led growth hypothesis is valid in Iran. However, results show that oil export has an inverse effect on economic growth, thus we suggest encouraging non-oil export activities in order to stimulate long-term economic growth in Iran.
In this paper, we study the non-linear relationship between oil revenues and real output growth of the Iranian economy during 1959-2007 using a threshold error correction model. The estimation results show that the response of economic growth to oil revenue growth in low regimes of oil revenues is greater than in high regimes of oil revenues. The threshold of oil revenues in Iran is about 37 per cent, in a way that increasing the oil revenues over this threshold results in aborting its positive impact on the gross domestic product and its significant effect. In addition, the impact of capital stock on economic growth in low oil revenues is also much more than that in high oil revenues. These results confirm the resource curse, higher rent-seeking activities and lower productivity hypothesis, especially during boom periods for oil revenues.