Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/36478
Authors: 
Farzanegan, Mohammad Reza
Markwardt, Gunther
Year of Publication: 
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
Iran
VAR modelling
JEL: 
E32
E37
Q32
Document Type: 
Working Paper

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