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Analysing the effects of oil price shocks on government expenditure in the Iranian economy

  • Azadeh Pazouki
    ,
  • Mohammad Reza Pazouki
Research Output:
Contribution to journal
Article
 Peer-review

Abstract

The Iranian economy is closely associated with the oil industry as a key player in the global oil market. Accordingly, oil price spikes have a major influence on government spending with oil revenues being a major source for financing different expenditure categories such as social security, education, arts and culture, and health care. Moreover, recently there have been economic sanctions imposed on Iran owing to the nuclear program which has greatly restricted Iranian oil exports and caused significant distress to government revenue which in turn has spill over effects on Iran's allocations for investment in the energy industry, and more importantly in government spending on care, education, culture and arts, and social security. This paper aims to analyse these overall effects and the impact of oil price spikes on Iranian government expenditure. In order to achieve our objective we rely on a VAR econometric model using data from 1965–2011. The results show that Iranian government social spending does not appear to be significantly affected by oil price shocks.

Publication Information

Output type

Research Output:
Contribution to journal
Article
 Peer-review

Original language

English

Pages from-to (Number of pages)

Pages 103-123

Journal (Volume, Issue Number)

International Journal of Energy and Statistics (Volume 02, Issue 02)

Publication milestones

  • Accepted/In press - 22/04/2014
  • Published - 30/06/2014

Publication status

Published - 30/06/2014

ISSN

2335-6812

Publication IDs

  • handle.net: 10547/625584

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