(To obtain a master's degree)
Bahman 1391
Abstract
Oil as a strategic commodity has an important role in both economic and political aspects. The world economy, especially during the last half century, has experienced significant fluctuations. has experienced the price of oil. Fluctuations in oil prices can have special effects on Iran's economy due to its high dependence on oil revenues. In this research, the effect of oil price shocks on government size in selected OPEC member countries (Iran, Venezuela) from 1980-2010 has been investigated using the vector autoregression (VAR) method. The results of the research show that if there is a shock to the price of oil in the direction of increase, considering the variable power of oil prices in explaining changes in the size of the government, in the long term this variable has a significant contribution to Iran's economy and its fluctuations can overshadow the structure of Iran's economy.
Key words: oil price impulses, government size
Chapter One
Introduction and generalities of the research
Introduction
Since stating the problem is considered a fundamental step to start a research project, therefore, in this chapter, he will understand the issue and also state its importance, and after formulating the goals and assumptions of the research, to the stages Different research methods and dimensions are mentioned. In this research, an attempt is made to study the effect of oil price shocks on the size of government in selected OPEC member countries (Iran, Venezuela). In this regard, according to the existing theoretical foundations, after presenting the relevant model, we estimate the model and analyze the results using the vector autoregression method. The world economy, especially during the last half-century of considerable fluctuations, has experienced the price of oil. Oil price fluctuations, both in importing and exporting countries of this product, have directly or indirectly affected many macro variables and by creating instability in the economy of these countries, it has faced a serious challenge to the country's officials. In addition to the role of income in exporting countries, oil also affects the economy of oil importing countries. The results of studies such as Hamilton [1] (1983), Murray [2] (1993) and Brown and Yusel [3] (2002), which are mostly conducted in the field of examining the effects of oil price fluctuations on the main variables of the macro economy, including gross domestic product, employment, investment and money supply in oil importing countries, indicate that the increase in oil prices has caused economic recession in these countries. While the drop in oil prices has not played a significant role in creating prosperity in the economy of these countries. But in the case of oil-exporting countries, the increase in oil prices from both sides, the demand side through the government budget and the supply side, by affecting the investment of the public and private sectors, stimulates the economy of these countries, which in turn has increasing or decreasing effects on the economic growth of oil-exporting countries, and the result of these two effects is known as the net effect of oil income on the economy of these countries. In oil exporting countries, the income from the export of this product constitutes a significant part of the government's income. In these countries, the amount of government spending is related to oil revenues. Therefore, it seems that the size of the government in these countries is influenced by the price of oil in the global markets. According to the above-mentioned information, knowing how oil shocks affect the economic fluctuations of OPEC member countries and the effect of these shocks on spending and, as a result, the size of the government is essential to It seems that by evaluating the effects of oil shocks on economic performance, appropriate solutions and policies can be adopted.
1-3- Research questions
Do oil shocks increase the size of the government in selected OPEC member countries (Iran, Venezuela)?
1-4- Research hypotheses
hypothesis This research is defined as follows: Oil impulses increase the size of the government in selected OPEC member countries (Iran, Venezuela).
1-6- Methods and tools of information gathering
In the theoretical basics section, the data collection method is in the form of a library, and in the practical section, relevant data has been collected from the websites of the Central Bank of Iran, Iran Statistics Center, OPEC and all related sites.
1-7- Information analysis method
This study aims to examine the role of oil shocks on the size of the government ( ) during the years 1980 to 2010. Therefore, for this purpose, after specifying the appropriate model and collecting information, using econometric techniques, the data will be analyzed in the framework of the vector autoregression (VAR) model, and statistical and econometric software will be used to estimate the model. They have research, we will pay.
1-8-1- Oil momentum
Oil momentum refers to shocks or sudden changes in the price of oil that may occur due to the political and economic conditions of the world. An oil boom can create problems for both exporting and importing countries (Mehrara and Miri, 2009). But the most common of them is the ratio of total government expenditure to GDP (Jaafari Samimi, 2009).
1-8-3- Globalization of trade
One of the phenomena that is taking shape today and may have taken shape and is going on in the fields of modern life is the phenomenon that is called "globalization" or " Globalization It is learned. due to the dependence of Iran's economy on oil; At the same time as the oil revenues of the government increase, the degree of openness and activities of the government also expands (Dadder, 2006). Studies show that the globalization of business in Iran has caused the growth of the size of the government and is the biggest explanation for the growth of the size of the government in Iran's economy. For this purpose, in order to examine any relationship between the globalization of trade and other variables, we need to quantify this phenomenon and choose an appropriate index for it. In many studies, the total export and import measure compared to the GDP is used (Roderik, 1998) [4]. Chapter Two: Literature Review Introduction: Due to the importance of oil revenues in the GDP, exports and annual budgeting in the economy of oil exporting countries (OPEC), oil price fluctuations can have an important and fundamental effect on the economic situation of these countries. Oil price fluctuations are the main source of economic fluctuations in oil producing countries. With the sudden increase in the price of oil, the foreign currency income from the sale of oil and as a result the government's expenses have increased sharply and the rapid growth of prices, wage rates and imports follows (Jaafari Samimi and Asari Arani, 2009). According to the definition of government size (the ratio of total government expenditure to gross domestic product (expenditure), a positive oil impulse can have significant effects on the size of the government. The size of the government in Iran's economy, during the last few decades, has been affected by the increase in global oil prices, revolution, war, post-war reconstruction and price growth. Especially, the dependence of the government's financial resources on the revenues from crude oil exports in this period has had a direct impact on the creation of the government structure of the economy and the expansion of the size of the government. At the same time, global fluctuations or shocks in the price of oil have also provided the reasons for economic instability and the intensification of government interventions in Iran's economy. In this regard, in this chapter, the theoretical foundations related to the effect of oil shocks on the size of the government and some concepts and definitions are described, and then domestic and foreign studies conducted in this field are discussed. 2-2-Basics Theoretical
The study of the effects of oil price fluctuations on oil importing and exporting countries has led to different results. For industrialized countries that often import oil, crude oil is one of the factors of production, and the increase in its price has the effects of inflation and recession, and the decrease in its price is considered a positive shock on the supply side.