Does the Iranian oil supply matter for the oil prices?

There is an increasing tension between the Iranian Government and the west on an increasingly likely European oil embargo and the Iranian threat to close the Strait of Hormuz. The main question is: What will happen to the international oil prices in the case of shocks in the flow of Iranian oil to the international markets? In this study, we analyze the dynamic relationship between the Iranian oil supply and international oil prices from January 1973 - September 2011, using a modified version of the Granger causality test introduced by Toda and Yamamoto (1995). Our results show that there is no Granger causality between the Iranian oil production and international oil prices. Historical data on the Iranian oil production do not provide any useful information to explain the current and future values of international oil prices. Thus, global oil prices do not follow shocks in the Iranian oil production.Oil price, Oil production, VAR model, Granger causality, Sanction, Iran

Illegal Trade in the Iranian Economy: Evidence from a Structural Model

This study investigates the main causes and consequences of import and export smuggling and estimates the relative index of smuggling in Iran from 1970 to 2002. The Multiple Indicators - Multiple Causes (MIMIC) econometric modelling is used for a comprehensive analysis of the latent variable of smuggling. The main results of this paper indicate that the rate of fine for smuggling and the general level of education reduce smuggling, while the tariff burden increases the incentives for illegal trade. More trade openness accompanies more illegal trade for the case of Iran. On average, the relative size of smuggling is about 13% of the total trade in Iran. The absolute amount of smuggling per year is about $3 billion.smuggling, structural equation model, Iran, illegal trade

Macroeconomic of populism in Iran

This paper uses the Dornbusch and Edwards (1990) analytical framework to investigate the macroeconomic populism in Iran under the Ahmadinejad government. My thesis endeavours to place the government of Ahmadinejad in a populist context and forecasts its fall mainly due to macroeconomic instabilities. The purpose of this study is to illustrate how closely Ahmadinejad’s government follows the model of Dornbusch and Edwards (1990).Iran; Populism; Ahmadinejad; Economic Growth

Does the Iranian oil supply matter for the oil prices?

There is an increasing tension between the Iranian Government and the west on an increasingly likely European oil embargo and the Iranian threat to close the Strait of Hormuz. The main question is: What will happen to the international oil prices in the case of shocks in the flow of Iranian oil to the international markets? In this study, we analyze the dynamic relationship between the Iranian oil supply and international oil prices from January 1973 -September 2011, using a modified version of the Granger causality test introduced by Toda and Yamamoto (1995). Our results show that there is no Granger causality between the Iranian oil production and international oil prices. Historical data on the Iranian oil production do not provide any useful information to explain the current and future values of international oil prices. Thus, global oil prices do not follow shocks in the Iranian oil production

Oil Dependency and Quality of Education: New empirical Evidence

The resource curse hypothesis suggests that resource-rich countries (especially oil dependent economies) show lower economic growth rates compared to resource-poor countries. We add to this literature by providing empirical evidence on a new transmission channel of the resource curse, namely, the negative long-run effect of oil rents on the quality of education. Our empirical analysis for more than 70 countries in the period of 1995-2015 shows a significantly positive effect of oil rents on the quantity of education measured by government spending on primary and secondary education. However, we find a robust and negative long-run effect of oil rents dependency on the objective and subjective indicators of quality of education, controlling for a set of other drivers of education quality and regional dummies. The significant negative effect of oil rents dependency on education quality can be explained by both the demand (e.g., skill acquisition) and supply (e.g., teacher quality) side channels

Effect of Oil Sanctions on the Macroeconomic and Household Welfare in Iran: New Evidence from a CGE Model

We examine the macroeconomic and household welfare consequences of oil sanctions in Iran. We use social accounting matrix (SAM) and develop a computable general equilibrium (CGE) model to simulate selected scenarios in which the exportation of oil from Iran to the rest of the world is banned. Our main results show that higher income households are losing more significantly under oil sanctions. Total imports, exports, private consumption, and GDP fall in response to oil sanctions. Interesting is the increase of net indirect taxes at the time of oil revenues fall. Real exchange rate appreciates in the oil sanction crisis. In addition, labor income increases while the capital income falls in response to oil sanctions in Iran. These simulations are in line with reality of the Iranian economy in post-oil sanction period

The response of income inequality to positive oil rents shocks in Iran: Implications for the post-sanction period

We study the short and long run responses of income inequality to the positive oil and gas rents per capita shocks in Iran from 1973 to 2012. Using vector autoregression (VAR)-based impulse response functions, we find a positive and statistically significant response of income inequality to oil rents booms within 4 years after the shock. The Autoregressive-Distributed Lag (ARDL) results show that a 10 percent increase in oil and gas rents per capita leads to 1.1 percent increase in income inequality in the long run. The results are robust after controlling for income-distribution channels in Iran. Our analysis can help policy makers to evaluate and accommodate the possible positive or negative effects of lifting sanctions on inequalities in Iran

Google It Up! A Google Trend-based Analysis of COVID-19 Outbreak in Iran

Soon after the first identified COVID-19 cases in Iran, the spread of the new Coronavirus has affected almost all its provinces. In the absence of credible data on people's unfiltered concerns and needs, especially in developing countries, Google search data is a reliable source that truthfully captures the public sentiment. This study examines the within province changes of confirmed cases of Corona across Iranian provinces from 19 Feb. 2020 to 9 March 2020. Using real-time Google Trends data, panel fixed effects, and GMM regression estimations, we show a robust negative association between the intensity of search for disinfection methods and materials in the past and current confirmed cases of the COVID-19 virus. In addition, we find a positive and robust association between the intensity of the searches for symptoms of Corona and the number of confirmed cases within the Iranian provinces. These findings are robust to control for province and period fixed effects, province-specific time trends, and lag of confirmed cases. Our results show how not only prevention could hinder affection in an epidemic disease but also prophecies, shaped by individual concerns and reflected in Google search queries, might not be self-fulfilling

Do sanctions reduce the military spending in Iran?

This study focuses on short and long-term effects of sanctions on military spending in Iran. Utilizing the annual data from 1960 to 2017 and the auto regressive distributed lag (ARDL) model, we show that the increasing intensity of sanctions dampen the military budget of Iran. By separating unilateral sanctions (where only the United States sanctions Iran) and multilateral sanctions (where, the United States acts in conjunction with other countries to sanction Iran), we show that only the latter class of sanctions have a statistically significant and negative impact on military spending of Iran. The negative effects of the multilateral sanctions on military budget are observed in both the short and long run time horizons. The results remain robust when controlling for other determinants of military spending such as gross domestic product (GDP), oil rents, trade openness, population, quality of political institutions, military expenditure of the Middle East region, non-military spending of government and the war period with Iraq

Causes and Impacts of Remittances: Household Survey Evidence from Egypt

This research provides a qualitative and empirical investigation of the microeconomic causes and impacts of remittances in Egypt. We use data from a field study, involving interviews of 304 remittance-receiving families across 16 Egyptian governorates during May 2015–May 2016. Our Ordinary Least Square (OLS) and Tobit regressions show that the duration of migration, migrant’s age, household income, and household head’s job are the most important predictors of the level of remittances. The first three variables induce the value of received remittances, while the final variable, household head’s job, acts to the contrary and reduces remittances. In terms of remittances allocation, everyday expenses and real estate investments absorb the vast majority of channeled remittances. Most of the respondents (85%) do not invest remittances, and those who invest remittances mainly reside in Upper and Lower Egypt due to the low living costs in these regions