Document Type : Article-Based Dissertations
Authors
1 Department of Economic, Science and Research Branch, Islamic Azad University, Tehran, Iran
2 Department of economic, Tehran University, Tehran, Iran
Abstract
Iran and the GCC countries (Saudi Arabia, Oman, Qatar, Kuwait, the United Arab Emirates and Bahrain) as the most important economic and political pillars in the oil-rich Persian Gulf region are among the most important oil exporters in Are global markets that their economy relies on oil revenues. Each of these countries, based on their economic structure, market requirements, domestic institutions and different business conditions, have used a diverse combination of sources of income to reduce the effects of oil shocks in different sectors of the economy. Therefore, the study of the effects of oil shocks on the macroeconomic variables of these countries separately and with a thematic comparative approach is significant. This paper aims to analyze the effect of oil revenue shocks on the variables of economic growth, trade balance and inflation of Iran and GCC countries and during the period 1980 to 2017 using the impact response functions of the Structural Vector Auto regression model (SVAR) it has studied and compared the effect of oil revenue shocks on macroeconomic variables of each of the mentioned countries separately.The results show that oil revenue shocks affect economic growth, trade balance and inflation in Iran and the GCC countries. Comparing the effect of oil shock on Saudi and Iranian economy, it can be said that the positive effect of oil shock on Saudi economic growth and trade balance is shorter than Iran in terms of duration, but the effect of shock on inflation in Iran is significant for more periods than Saudi Arabia. Also, the positive effect of the oil shock on Bahrain's economic growth and trade balance is greater than that of Iran in terms of duration of effect, but the effect of the oil revenue shock on Bahrain's inflation is significantly greater than that of Iran for shorter periods. In Kuwait, the effect of oil revenue shocks on economic growth and trade balance is more stable and longer than in Iran, Saudi Arabia and Bahrain, but the intensity of the impact of oil shocks on inflation in Kuwait is much less compared to Iran, Saudi Arabia and Bahrain. In Oman, the effect of the oil revenue shock on the country's economic growth and trade balance has been more stable for longer periods compared to Iran, Saudi Arabia, Bahrain and Kuwait, and the shock effect on Oman inflation has had little effect. Comparing the effect of the oil shock on economic growth, the UAE's trade balance with other countries, it can be said that the effect of the shock is somewhat similar to Saudi Arabia and the positive reaction of UAE inflation to oil revenue shocks is different from the inflation reaction of other countries except Bahrain. Qatar's economy has not been relatively affected by oil revenue shocks compared to other countries surveyed. In Qatar, oil revenue shocks have no significant effect on economic growth, trade balance and inflation and behave differently from other countries studied. In terms of behavioral comparisons between these economic variables, Iran's inflation response to oil revenue shocks is significantly different from other GCC countries. As Iran's inflation has shown a positive response to the oil revenue shock, the shock effect has not disappeared in the long run, but in most GCC countries, inflation has shown a slight reaction to the oil revenue shock (except Saudi Arabia) that the shock effect in Long gone. In conclusion, a major heterogeneity due to the different degrees of dependence of the economies of these countries on oil revenues and the specific features of their economic structure is observed, which causes significant differences in the response of their economies to oil shocks in terms of duration. Time and intensity are affected.
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