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Assessing alternative options for allocating oil revenue in Iran

Barkhordar, Z. A ; Sharif University of Technology | 2013

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  1. Type of Document: Article
  2. DOI: 10.1016/j.enpol.2013.08.099
  3. Publisher: 2013
  4. Abstract:
  5. The present paper focuses on medium-term effects of alternative windfall management strategies for a resource abundant country where the resource revenues are expected to last over a prolonged period. In particular, the trade-off between spending and saving is analyzed within the framework of a recursive dynamic computable general equilibrium model. The model is further validated against historical data available for 2001-2010. The total factor productivity is calculated endogenously in the model based on a function that reflects the changes in factor productivity. The results suggest that saving oil revenues, whether in an oil fund or through physical investment in domestic sectors, leads to a higher economic growth. However, physical investment is superior in the short to medium term based on the resultant GDP while creating an oil fund might be more beneficial in the post oil era
  6. Keywords:
  7. Oil revenue management ; Recursive dynamic CGE model ; Validation ; Dynamic cge models ; Dynamic computable general equilibrium models ; Economic growths ; Management strategies ; Oil revenues ; Physical investments ; Total factor productivity ; Dynamics ; Investments ; Economics ; Economic growth ; Energy market ; Gross Domestic Product ; Model validation ; Oil production ; Oil supply ; Trade-off ; Iran
  8. Source: Energy Policy ; Volume 63 , 2013 , Pages 1207-1216 ; 03014215 (ISSN)
  9. URL: http://www.sciencedirect.com/science/article/pii/S0301421513009038