Public Economics
Rezgar Feizi; Sahar Amidi; Khaled Ahmadzadeh; Bakhtiar Javaheri
Abstract
The exchange rate and international oil price are key variables to cause the effects of external shock on economics and the relationship to domestic economy. Since in countries like Iran, most government revenues come from exchange earnings from the international markets by oil exports, the impact of ...
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The exchange rate and international oil price are key variables to cause the effects of external shock on economics and the relationship to domestic economy. Since in countries like Iran, most government revenues come from exchange earnings from the international markets by oil exports, the impact of these two variables on the economy has significant consequences. In addition, it should be considered how fluctuations in the exchange rate and international oil prices can impact policy and international relations. According to the international trade perspective, it is believed that the exchange rate affects the economy through the changes in exports and imports commodities; therefore, expectations of the exchange rate will affect the price of the products traded. Moreover, the impact of oil price on the production of commodities changes the level of supply for activities and income of institutions through changes in the production factors and intermediary imports price. We conclude that if any change in both exchange rate and oil prices occurs, it will cause a change in welfare indicators. This research has therefore arisen to fill this void in the literature. Moreover, it utilizes a logistic model to represent the change in the exchange rate and oil price. Based on empirical results, a recursive computable general equilibrium model is constructed to predict future social welfare and simulate the impact of exchange rate fluctuations along with the oil price shock. The results are presented in different scenarios using the 2011 Social Accounting Matrix (SAM).
Pardisolssadat Seyedmashhadi; Seyed Abdolmajid Jalaee Esfand Abadi; Mehdi Nejati; Mohsen Zayandehroodi
Abstract
the present paper evaluates the effect of investment risk spillover on key economic indicators using a CGE model and the GTAP.9 database have been used for this purpose. Two scenarios of 10% and 3% increase in investment risk are considered in order to investigate the effect of these changes according ...
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the present paper evaluates the effect of investment risk spillover on key economic indicators using a CGE model and the GTAP.9 database have been used for this purpose. Two scenarios of 10% and 3% increase in investment risk are considered in order to investigate the effect of these changes according to a recent trend analysis of economic indicators in Iran and the trend of the Iranian economy towards globalization and opening of the economy windows. The results show that both scenarios reduce investment risk, inflation, gross domestic product and total investment. Government expenditures are reduced in all sectors of the economy except for the service sector, which is almost unchanged. The exports are increased in all sectors and the imports are declined in sectors of agriculture, industry and services. As well as, the results show that the import of the oil and gas sector has not been heavily influenced by the investment risk due to its governmental status. By assessing these two scenarios and the sensitivity of the macroeconomic indicators to the degree of risk change, it can be stated that the key economic indicators will be significantly improved by managing the risk of investment.
