Reihaneh Gaskari; Ali Reza Eghbali; Hamid Reza Hallafi
Volume 7, Issue 24 , October 2005, , Pages 77-94
Abstract
Revenues obtained through gas and oil sale compose a considerable and important part of the Iranian government revenue and the GDP. In this paper, after a brief review on oil sector and income resulting from its export, the authors study the literature pertaining to export instability and its impact ...
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Revenues obtained through gas and oil sale compose a considerable and important part of the Iranian government revenue and the GDP. In this paper, after a brief review on oil sector and income resulting from its export, the authors study the literature pertaining to export instability and its impact on economic growth. Using moving average method with a five-year lag, they found a process for export divergence from which considered as a base for instability. They suggest five definitions for instability as follows: Divergence absolute value, square root of divergence, squared divergence, divergence absolute value for one unit of the estimated amount, and negative divergence. Instability is then considered as a variable in the traditional production function of Feder, which is estimated by ARDL model using five definitions of instability. The findings indicate that there is a negative relation between the first three different definitions of instability and economic growth. Regarding the fourth definition, there is no significant relation and cointegration among the variables is also doubtful. However, regarding the fifth definition, there is a positive and considerable relation between export instability and economic growth and it seems that the fifth definition is not a suitable method to define oil export instability.
