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The Role of Oil Price Shocks in Bussiness Cycles of an Oil-Exporting Country: Facts from Iran with a General Equillibrium Approach
, M.Sc. Thesis Sharif University of Technology ; Madanizadeh, Ali (Supervisor)
Abstract
In this research, we develop a Real Business Cycle model for Iran, as Small Open Economy. In this model, which is designed to measure the role of oil price shocks in Iran’s business cycles, the positive oil price shocks, as well as increasing the revenue of exporting oil, raises the price of oil-based tradable goods. Additionally, it causes the fiscal policy variables (taxes and government expenditures) to change. Also the productivity of this economy is fluctuated by oil price fluctuations. The model is estimated via Impulse Response Function Matching method using a SVAR model as the auxiliary model. The results from the theoretical model show that near 50 percent of non-oil GDP cycles and...