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Oil exports and the Iranian economy

1st Person: Esfahani, Hadi Salehi
Additional Persons: Mohaddes, Kamiar; Pesaran, Mohammad Hashem
Type of Publication: Paper
Language: English
Published: Center for Economic Studies and Ifo Institute (CESifo) 2009
Series: IZA Discussion Papers
Keywords: Mineralölwirtschaft
Erdöl
Export
Einnahmen
Wirtschaftswachstum
Mineralölpreisschock
Makroökonomischer Einfluss
Dutch Disease
Iran
Export
Revenue
Economic growth
Resource wealth
Iran
Online: https://www.econstor.eu/bitstream/10419/36322/1/615085288.pdf
id
oai_econstor.eu_10419-30690
recordtype
econstor
institution
MPG
collection
ECONSTOR
title
Oil exports and the Iranian economy
spellingShingle
Oil exports and the Iranian economy
Mineralölwirtschaft
Erdöl
Export
Einnahmen
Wirtschaftswachstum
Mineralölpreisschock
Makroökonomischer Einfluss
Dutch Disease
Iran
Export
Revenue
Economic growth
Resource wealth
Iran
Esfahani, Hadi Salehi
IZA Discussion Papers
title_short
Oil exports and the Iranian economy
title_full
Oil exports and the Iranian economy
title_fullStr
Oil exports and the Iranian economy
title_full_unstemmed
Oil exports and the Iranian economy
title_sort
Oil exports and the Iranian economy
format
electronic Article
format_phy_str_mv
Paper
publisher
Center for Economic Studies and Ifo Institute (CESifo)
publishDate
2009
language
English
topic
Mineralölwirtschaft
Erdöl
Export
Einnahmen
Wirtschaftswachstum
Mineralölpreisschock
Makroökonomischer Einfluss
Dutch Disease
Iran
Export
Revenue
Economic growth
Resource wealth
Iran
topic_facet
Export
Revenue
Economic growth
Resource wealth
Iran
author
Esfahani, Hadi Salehi
author2
Mohaddes, Kamiar
Pesaran, Mohammad Hashem
author2Str
Mohaddes, Kamiar
Pesaran, Mohammad Hashem
description
This paper develops a long run growth model for a major oil exporting economy and derives conditions under which oil revenues are likely to have a lasting impact. This approach contrasts with the standard literature on the Dutch disease and the resource curse, which primarily focus on short run implications of a temporary resource discovery. Under certain regularity conditions and assuming a Cobb Douglas production function, it is shown that (log) oil exports enter the long run output equation with a coefficient equal to the share of capital. The long run theory is tested using a new quarterly data set on the Iranian economy over the period 1979Q1-2006Q4. Building an error correction specification in real output, real money balances, inflation, real exchange rate, oil exports, and foreign real output, the paper finds clear evidence for two long run relations: an output equation as predicted by the theory and a standard real money demand equation with inflation acting as a proxy for the (missing) market interest rate. Real output in the long run is shaped by oil exports through their impact on capital accumulation, and the foreign output as the main channel of technological transfer. The results also show a significant negative long run association between inflation and real GDP, which is suggestive of economic inefficiencies. Once the effects of oil exports are taken into account, the estimates support output growth convergence between Iran and the rest of the world. We also find that the Iranian economy adjusts quite quickly to the shocks in foreign output and oil exports, which could be partly due to the relatively underdeveloped nature of Iran’s financial markets.
url
https://www.econstor.eu/bitstream/10419/36322/1/615085288.pdf
series
IZA Discussion Papers
seriesStr
IZA Discussion Papers
IZA Discussion Papers
series2
IZA Discussion Papers
series2_facet
IZA Discussion Papers
up_date
2019-03-18T03:50:11.441Z
_version_
1628313761878114305

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