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Title:The effects of oil price shocks on the Iranian economy PDF Logo
Authors:Farzanegan, Mohammad Reza
Markwardt, Gunther
Issue Date:2008
Series/Report no.:Dresden discussion paper series in economics 15/08
Abstract:The Iranian economy is highly vulnerable to oil price fluctuations. This paper analyzes the dynamic relationship between oil price shocks and major macroeconomic variables in Iran by applying a VAR approach. The study points out the asymmetric effects of oil price shocks; for instance, positive as well as negative oil price shocks significantly increase inflation. We find a strong positive relationship between positive oil price changes and industrial output growth. Unexpectedly, we can only identify a marginal impact of oil price fluctuations on real government expenditures. Furthermore, we observe the Dutch Disease syndrome through significant real effective exchange rate appreciation.
Subjects:macroeconomic uctuations
oil price shocks
developing economies
VAR modelling
Document Type:Working Paper
Appears in Collections:Dresden Discussion Paper Series in Economics, Faculty of Business and Economics, TU Dresden

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