http://repub.eur.nl/res/aut/46149/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/32491/ 2012-06-07T00:00:00Z We develop a model of the dynamics of economic sanctions in conjunction with the response of the sanction target. We apply this model to the case of the EU and US boycott of Iranian oil. Our VAR model finds significant impacts of sanctions both on key economic variables and on the political system. These effects, however, are limited in time and occur in the first two to four years of the sanction episode only because adjustment of economic structures mitigates the economic and political impact of the sanctions. http://repub.eur.nl/res/pub/32269/ 2012-05-10T00:00:00Z The main purpose of this study is to investigate the dynamic relationship between government revenues and government expenditures in Iran as a developing oil export based economy. Moreover, I want to know how government expenditures and revenues respond to oil price (revenue) shocks. I use two different groups of the variables with two different time periods (quarterly and annually) to investigate the robustness and reliability of the results and to provide a more comprehensive base for comparison against different methodologies. For the first group of the variables (including oil price, oil revenues to GDP ratio, government total expenditures to GDP ratio and a dummy variable for capturing the effects of war with Iraq) I apply an SVAR model using annual data for the period 1970-2008. The results of the impulse response functions and variance decomposition analysis indicate that the causality is running from oil revenues to GDP ratio to government total expenditures to GDP ratio. Moreover the contribution of oil revenue shocks in explaining the government expenditures to GDP ratio is stronger than the contribution of oil price shocks. For the second group of the variables (oil revenues, government total revenues, government current expenditures, government capital expenditures, money supply and CPI) unrestricted VAR and VEC models have been applied using quarterly data for the period 1990:2-2009:1. The results of the impulse response functions and variance decompositions analysis for both VAR and VEC models indicate that the strong causality is running from government revenues to government expenditures (both current and capital) in Iranian economy while the evidence for the reverse causality is very weak. The results show that in the VEC model which the long-run behavior of endogenous variables is restricted to converge to their co-integration relationships, oil revenue shocks can affect the other macroeconomic variables more directly while in the VAR model this changes and works through the total revenues channel. Moreover the findings indicate that government revenues, government expenditures and money supply are important determinants of domestic price level in Iranian economy. Overall my results support the revenue-spending hypothesis for Iran. In this context Iran should enhance the effectiveness of fiscal policy by making budget expenditure less driven by revenue availability. This policy can help to avoid the costs and instability that variations in public spending generate mostly due to the fluctuations in oil revenues. http://repub.eur.nl/res/pub/31594/ 2012-02-27T00:00:00Z In this study, I investigate the short run and long run effects of government size and exports on the economic growth of Iran as a developing oil export based economy for the period of 1974 to 2008. For this purpose I use the bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. A modified form of Ram’s (1986) model has been applied to include both government size and exports as determinants of economic growth in addition to labor force and capital. I use total exports, oil exports and non-oil exports respectively in three different equations to assess their effects on economic growth. Moreover, according to Armey curve(1995) in each of the equations I test the existence of non-linear relationship between government size and economic growth. My findings show that in all of the equations both in long run and short run the Armey curve is valid for Iranian economy, indicating that both a very big size and a too small size of government are harmful for growth and Iranian government should adjust its size (to have smaller size, compared to the average size over the period of this study) for obtaining higher rates of growth. The results show that total exports, the amount of oil exports in terms of barrels and oil prices could affect the economic growth positively and significantly both in short run and long run. However because of the weaknesses of the Iranian non-oil sectors, the non-oil exports could not have significant effects on growth in the long run. As a result of this study in the short run, Iran should try to attract foreign technologies and investments to develop the capacity and ability of its oil production. In the short run this can be a reliable factor for having the stable economy in comparison with relying on uncertain oil prices. In the long run Iran should use the oil revenues to improve its economic structure and invest on some non-oil sectors to diversify its non-oil exports. This can create new resources for government revenues and will reduce the dependence of the economy on Oil exports. http://repub.eur.nl/res/pub/30691/ 2011-12-01T00:00:00Z Abstract The objective of this study is to examine and investigate both behaviour and determinants of domestic prices and inflation rate in Iran as a developing oil export based economy. I apply two models; the first model is for investigating the main determinants of domestic prices while the second model considers the main determinants of inflation rate. The period of study is from 1973 to 2008. Some econometrics techniques such as unit root test, cointegration test, ECM model and causality test have been used. The first model is constructed according to the studies that mostly have tried to investigate the inflation in other developing and developed countries. The results indicate that foreign prices, GDP, exchange rate and the two dummy variables DT80 and DT88 ( for capturing the structural break which have been caused respectively by the war with Iraq and the subsequent reconstructions after war) have significantly affected the domestic prices in Iran. Furthermore, in the short run the main determinants of domestic prices have been foreign prices and DT88. In contrast with Aljebrin (2006) who has considered this model for other developing oil export based economies our estimations of first model demonstrate some acceptable results about the factors that have affected the domestic prices of Iran. In the second model I apply the model which has suggested by Aljebrin(2006) to investigate the inflation in developing oil based economies. The results show that money growth, oil production growth, non-oil GDP growth and two dummy variables DT80 and DT88 have affected Iranian inflation in long run. Moreover in the short run the main determinants of inflation have been non-oil GDP growth and DT88. Our results imply that the rapid development of the non-oil sector and performing some useful policies for restructuring the economy such as diversifying the economy from the oil sector will strengthen the economy and reduce the importance of oil production as a source of inflation.