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An Analysis of Oil Revenues and Monetary and Financial Policies on Iran's Long-term Economic Growth

Mir Jafari, Faezeh Sadat | 2019

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 52346 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Kianfar, Farhad
  7. Abstract:
  8. In many papers, GDP is used as a measure of economic growth, which is shown to possess a nonlinear structure. The study focuses on the nonlinear Granger causality between liquidity, government spending, oil revenues and economic growth by markov-switching vector autoregressive and markov- switching Granger causality approach for the period of 1369-1397 for Iran. The empirical results from MSAI(2)-VAR(4) suggest that Oil revenues and government spending have a significant impact on economic growth in both regimes. Also, markov- switching Granger causality results are quite different from the traditional Granger causality results, that suggests the nonlinear Granger causality has more accurate results for policymakers in achieving high economic growth. Using the traditional Granger causality method can lead policymakers wrong. Forecasting for next three seasons shows that government spending, liquidity and oil revenues are all causes of economic growth and vice versa. Policymakers can use all three of these tools for economic growth and development. with respect Impact of oil revenues on government spending, it is suggested that the government reduces dependence on oil revenues to avoid the impact of sanctions and oil price shocks
  9. Keywords:
  10. Monetary Policy ; Fiscal Policies ; Oil Income ; Vector Autoregressive Model ; Growth Economy Forecasting ; Granger Causality ; Markov Switching

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