Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316687 
Year of Publication: 
2025
Citation: 
[Journal:] International Journal of Business and Development Studies [ISSN:] 2538-3310 [Volume:] 17 [Issue:] 1 [Publisher:] University of Sistan and Baluchestan [Place:] Zahedan, Iran [Year:] 2025 [Pages:] 75-101
Publisher: 
University of Sistan and Baluchestan, Zahedan, Iran
Abstract: 
The positive impacts of fiscal policy could be undermined when accompanied by uncertainty. We examined the effect of fiscal policy uncertainty on economic activities in the provinces of Iran. It includes production, investment, unemployment, and economic participation of the active workforce in these provinces, taking into account the effects of economic sanctions imposed on the economy. We employed two types of shocks: fiscal level shock (representing fiscal policy) and its volatility shock (as fiscal policy uncertainty), which derived from a specified fiscal reaction function. We estimated a Panel VAR model using provincial data from 2003 to 2020. The results of the impulse response function indicated that following the impulse in the fiscal policy uncertainty, the response shows an increase in the unemployment rate in the short run, a decrease in the capital investment, and an increase in the inflation rate in the short and medium terms. In the medium and long term, the response indicates a decrease in GDP growth and a reduction in the economic participation rate of the active workforce.
Subjects: 
Fiscal policy
uncertainty
provinces
Iran’s economy
Panel VAR
Persistent Identifier of the first edition: 
Creative Commons License: 
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Document Type: 
Article
Document Version: 
Published Version
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