Oil Revenues Fluctuations and inflation in Iran

Transcription

1 International Journal of Applied Economic Studies Vol. 1, No. 1 December 2013 Available online at Oil Revenues Fluctuations and inflation in Iran Abbas Rezazadeh karsalari 1, Hassan Saberi 2 1, 2 Department of Management, Islamic Azad University, Tafresh Branch, Tafresh, Iran rezazadeh296@yahoo.com Abstract Oil revenue plays an important role in economy of Iran as an oil exporting country. The objective of this study was to examine the effect of oil price shock on inflation in Iran using data from 1960 to We apply the Johansen cointegration technique, to empirically examine the longrun comovement as well as short run error correction mechanism (ECM) between oil revenues and inflation and different measures of oil shocks. The findings suggest that oil shocks have a significant effect on inflation. But the effects of positive shocks are much stronger and longer lasting than the negative shocks. In other words, the relationship between two variables is asymmetric. To reduce the macroeconomic instability arising from the volatility of oil revenues as well as inducing the governments to save part of oil revenues for future generations, oil funds have become increasingly popular in oil exporting countries. Oil funds could help mitigate the transmission of oil revenues shocks to harsh changes in money aggregates, prices and exchange rates. Keywords: Oil revenues Fluctuations, Oil Exporting Countries, Inflation, Johansen cointegration test. JEL classification: E62, H50, N15 1. Introduction Oil revenues Fluctuations are generally acknowledged to have important effects on both economic activity and macroeconomic policy. In particular, the very recent highs registered in the world oil market are causing concern about possible slowdowns in the economic presentation of the most developed countries. Oil production generally accounts for a large share of the GDP of oilexporting countries and oil revenues increases directly increase the country s currency value (total oil production increases because the value of oil production increases: the income effect). However, the total effect of oil revenues shocks on economic performance mostly depends on what the oil producers do with this extra revenue. High oil prices increase real national income through higher export incomes (Kornonen and Juurikkala, 2007). As a consequence, wealth will be transferred from oilimporting countries to oilexporting countries, leading to greater purchasing power for economic agents of oilexporting countries (Berument and Tasci, 2002). Oil price is very instable. Instability is very costly, as economies and budgets adjust asymmetrically (Mehrara and Oskoui, 2007). Oil price fluctuations are a major source of disturbance for the economies of oilexporting countries given the relative importance of the oil sector in production and exports and uncertainty in the world oil markets (Mehrara, 2008; Behbudi et.al, 2010). Since the first oil shock in 1973, almost the economic performance of Iran has been related to its natural resource wealth. The economy has experienced relatively lower per capita GDP growth and higher income inequality. This may support this hypothesis that natural resources seem to have been more of a curse than a blessing for Iran. Numerous researchers have supported the view that resource poor countries often outperform resourcerich countries (Sachs and Warner, 1995). The literature around economic growth shows that the economists have spent much time to recognize the details that causes economic growth. The economists have succeeded to give facts about the sources of economic growth. But, until now the relation of output with the oil revenues in oil exporting countries has remained debatable. Specifically, the issue that whether oil revenues is blessing for economic growth or it is curse generates a significant debate both theoretically and empirically. Oil prices have climbed significantly over the last some years. Crude oil prices have increased on average from US $25 per barrel in 2002 to US $115 per barrel in An increase in petroleum prices tends to have a contractionary effect on world demand and growth in the short time. Higher crude oil prices raise inflation, with the magnitude depending in part on the extent of labor market flexibility and the ability of producers to pass on cost increases to customers. Over time, the effect of increasing oil prices on activity and inflation depends also on policy responses and supply side effects. Oil revenue is the main part of government income and it recently has played an important role in reimbursing government expenditures in Iran. The Iranian economy is deeply dependent on oil revenues, with about 15 percent of nominal GDP originating in the oil sector during the period Moreover about 50 percent of the government's revenues and 7075 percent of exports are derived from the oil sector (Mehrara and et.al, 2010). This paper studies the asymmetric effect of oil price shocks on inflation in Iran during using Johansen cointegration test. The paper is organized in four sections. Section two discusses the methodology and the mechanisms through which oil price or revenues influence asymmetrically economic activities in oil exporting countries and reviews empirical literature in brief. Section three presents the econometric model and empirical results. Finally section four concludes. 2. Literature Review Increasing oil revenues contribute to higher levels of government expenditure. As the dominant role of the government in the domestic economy, which is beyond the financial expenditures and includes great implicit expenditures, current 7

2 Oil Revenues Fluctuations and inflation in Iran Abbas Rezazadeh karsalari, Hassan saberi and capital expenditures of the government will increase as oil revenue increases. When current and capital expenditures of the government raised, generally in excess of the absorption capacity of the economy, which would lead to more pressure on domestic prices. The prices of traded goods are mainly determined externally and so most of the inflationary pressure is reflected in higher prices for nontraded goods. The rise in relative prices of nontraded goods (real appreciation) increases the relative demand for imports. When the real exchange rate is overvalued then inflation tends to fall. Excess money growth adds to inflation. In addition, given that net foreign reserves of the central bank increases, the money supply will increase. The increased money supply and government expenditures will shift the demand curve upward (Akpan, 2009; Arman and Aghajari, 2010). Increasing oil revenues and foreign exchange revenues lead to higher volumes of imports. As the Iran industrial output is highly dependent on imported raw materials and capital intermediaries, the volume of domestic production will rise, shifting the supply curve to the right. However, limited capacity of domestic industries and inefficiency of production technology impede the rapid adjustment of supply section to increased demand. Thus, the combination of movements of supply and demand curves will increase the level of production and prices in the economy. The experience of the Netherlands in the 1970s following the discovery of the Groningen gas field gave rise to concern over Dutch disease. This was defined explicitly as the contraction in the nonhydrocarbon traded sector following a real appreciation of the exchange rate. For the Netherlands this meant a decline in manufacturing. However, economists also began to observe that for developing countries, it was agriculture that took the hit (Stevens, 2003). Originally, Dutch disease had a very specific meaning20. It referred to the appreciation of the real exchange rate. This as a result of inflation arising from spending the revenues leading to an overheated economy plus an appreciation of the nominal exchange rate as the domestic currency attracted higher demand. The result was a contraction in the nonoil, gas or mineral traded sector. Thus the output of the nonresource traded goods sector is lower than it was initially (Fardmanesh, 1991, Stevens, 2003; Akpan, 2009). "Dutch Disease" in the long run after a shock to positive changes in oil price, implying the reduction of competitiveness in the tradable sector of the Iranian economy. Inflation response to innovations in light oil prices is significantly positive. Shortrun inflationary effects of increasing oil prices on the Iranian economy as a main exporter of these products in the world. This response can be defined within the "resource movement" and "spending effects" explained by Corden (1984). The resource movement only happens when the production factors like labor have the highest mobility between oil and nonoil sectors. Iincreasing oil prices and booming oil industry absorb labor from the other sections of the economy which is wellknown as "resource movement". However, considering the different level of labor qualifications between oil and nonoil industries and high capital intensity of oil industries, "resource movement" cannot be a case in Iran (Farzanegan, Markwardt, 2009). In a country like Iran which is highly dependent on oil revenues, consumption patterns of consumers are accompanied by higher oil prices. They cannot adjust their consumption level instantly to negative changes in oil price. Therefore, extra demand and shortage of supply that is obvious in response to industrial output push the price level upward. Another reason for increasing in inflation during negative changes of oil price in Iran can be found in increasing government budget deficit effects. In order to cover its budget deficit, the government may increase money supply or issuing governmental bonds. All in all, these policies can lead to a stagflation situation in the economy which is highly dependent on oil dollars (Farzanegan, Markwardt, 2009). The foreign reserves earned from the boom could give rise to an expansion of the money supply. Unlike domestic taxes, foreign revenues in the form of royalties on natural resources do not induce a reduction in disposable income, and their domestic spending leads to the creation of additional money. However, the consequences of such a boom depend upon the responses of money demand to the boom. If the change in money demand is equal to the supply response then the monetary effects may be of little consequence for the rest of the economy. Furthermore, in the case of oil, it is not certain that a money supply expansion will follow the boom. In developing countries, oil revenue typically accrues to the state; only if the state injects this money into the economy, for example through raising the budget deficit, will the money supply expand. This raises the possibility of some deflationary pressure following the boom if the money supply fails to expand as fast as any increase in money demand that may follow the boom (Arman, Aghajari, 2009). Loscos et.al, (2011) analysed the relationship between oil price shocks and the macroeconomic evolution of the G7 countries. They provided evidence in favour of a nonlinear relationship across the samples. Their results showed that the response of output and inflation to oil price shocks becomes weaker from 1970 until the late 1990s. They further observed the impact of oil price shocks on inflation to recover some of its initial importance in the 2000s, whilst they cannot find robust evidence of an influence of oil price shocks on GDP. Nevertheless, the transmission of oil price shocks to the economy was weaker than in the 1970s, and then oil price shocks had lost some of their explanatory power. Consequently, the causes of the slight rise of inflation in the G7 countries during the 2000s should be looked for in other factors. 3. Model Presentation and Empirical Results In this section empirical model of asymmetric effects of oil revenues shocks on inflation, is specified and estimated. In inflation equation, in addition to positive and negative oil revenues shocks, the effect of other variables, including investment are considered. In this study, inflation equation is specified as follow: 8

3 International Journal of Applied Economic Studies Vol. 1, No. 1 December 2013 log P t 0 n j 0 pos j t j n j 0 neg j 9 t j X where indicates the first difference, log is natural logarithm, is aggregate price level, pos is positive oil revenues shock, neg is negative oil revenues shock, X is explanatory variables and is error term. In addition, asymmetry hypothesis implies: H0 : j j j 1,... n In inflation model, various variables are used as control variables in vector X. Some of these variables are: physical investment, human capital, free trade, inflation rate, population, government expenditures, geographical variables, foreign direct investment, exchange rates premium, abundant natural resources, institutions and the quality of macroeconomic policy. In this study, due to the limited sample size, availability of data and diagnostic test, different combinations of variables, such as government expenditures growth, (Δ ln G), Liquidity growth, (Δln M2), growth of real GDP, (Δ ln Y), real money supply growth (Δ lnm2/p), the percentage changes in real exchange rate, (Δ ln EX), investment to GDP ratio (inv/y) or investment growth (Δ ln inv), as control variables in vector X are used. In fact, government expenditures, money balance and inflation variables as the demand side factors and investment ratio as the supply side factor affect the production. One of the important and considerable factors in this model is estimation method of positive and negative oil revenues shocks. The methodology of estimation of positive and negative oil revenues shocks is as follows Positive and Negative oil revenues Shock In empirical studies, any unanticipated change is considered as the shock. Researchers used different techniques for differentiation between positive and negative shocks. For example, Mishkin (1982), Cover (1992), Karras (1996) considered the residual of the money supply growth equation (M2) as monetary shocks. I used the GARCH approach to decompose positive and negative shocks, but as the ARCH effects are not significant ( conditional variance is fixed. Then I used the residual of the oil revenue growth equation as oil shocks. In fact, in these studies oil growth is divided into anticipated and unanticipated ones, and the residual from the estimated equation of oil revenue growth is used as unanticipated oil shock, as follows: t { ( ) } { ( ) } Where, is the oil revenue shock and and are the negative and positive components of the shock or, to express it differently, unexpected depreciation and appreciation of the oil revenue Data and unit root tests Time series data required to this research include aggregate price level(p), nonoil GDP(Y), real oil revenue (OILREV), money supply(m2), exchange rate(ex), government expenditures(g) and fixed capital formation or investment to GDP ratio (INV/GDP). The sources for data are balance sheets of the Central Bank of Iran during the period The cointegration analysis is subject to the integration order of time series. The integration orders of variables are examined by Augmented Dickey Fuller (ADF) and phillipsperron (PP) unit root tests. According to ADF and PP tests in Table (1), it can be seen that all variables except the investment to GDP ratio, INV/GDP, are integrated of order one so that when first differenced, all would be stationary. Table 1: PP and ADF test statistic variables in level and 1st difference Variable ADFtest PP test ADF test statistic 10% 5% 1% PP test statistic t 10% Values 5% Values 1% Values Values Values Values Dlog y 4.11*** *** Dlog oil 5.45*** *** Dloginv 4.66*** *** Dinv/y 5.20*** *** DlogG *** DlogM2 3.72*** *** DlogP DlogM2P 3.48*** Dlogex 5.17*** *** Notes: *** respectively show the significance in 1% level.

4 Oil Revenues Fluctuations and inflation in Iran Abbas Rezazadeh karsalari, Hassan saberi 3.3. Cointegration test As the level variables are nonstationary, the cointegration among the levels of the variables should be tested. It is expected that the real oil revenue, inflation, and money supply have an equilibrium relationship. If there is long run relationship between these variables, the residuals from the cointegrating relationship will be considered as imbalance affecting inflation symmetrically or asymmetrically. Therefore, the cointegration among these variables is tested by using the Johansson methodologies. The test results are presented in Table (2). As it can be seen in the table, Johansson test confirms one long run equilibrium relationship between these three variables. According to Granger representation theorem, a long run equilibrium relationship implies error correction mechanisms. The error correction mechanism ensures the long run relationship. Thus at least one variable in the relationship should react to inflation imbalances or the residuals of long run relationship, namely ECM. In the next section we examine the importance of inflation imbalances along with other variables on the inflation. Also, these imbalances may affect the production linearly (symmetric) or nonlinearly (asymmetric). Table 2: Maximal eigenvalue and trace test for cointegration vectors Variables in longrun relationship: ln(oil), ln(p), ln(m2) A: cointegrating space Maximal eigenvalue test Null Alternative LR statistic Trace test 95% critical value Null Alternative LR statistic 95% critical value 0=r 1=r =r r r 1 2=r r 1 r r 2 3=r r 2 3=r B: cointegrating vector Loil Lm2 lp ECM (2.57) (2.44) Notes: tratios in parentheses and Trace and Maxeigenvalue test indicates 2 cointegrating eqn(s) at the 0.05 level 3.4. Estimating the short run nonoil GDP and asymmetric test In this section, the effects of positive and negative oil shocks as well as the supply and demand side factors on the inflation in Iran economy will be studied. For this purpose, we estimate various specifications according to the Table (3). The estimates in columns one to five are based on linear or symmetrical specifications. In other words, in these equations it is assumed that the effects of positive and negative oil shocks on real production are symmetric so that the relationship is linear. In all linear specifications, according to, explanatory variables explain 60 to 70 percent of inflation changes. The coefficients for the investment to output ratio (INV/GDP) in all the specifications are significant and of the expected sign (negative). The investment to output ratio (INV/GDP) also reduces the inflation significantly with the size of coefficient changing between 0.20 to 0.28, the variables of loginv which are not significant have been removed. Real oil revenue in symmetry specification decreases the inflation by coefficient of 0.06 to Thus the results show the negative relation between real oil revenue and investment with inflation. The real nonoil GDP growth enters negative and significant in the inflation equations with the size of coefficient 0.42, the exchange rate enter negative and insignificant in the inflation equations with the size of coefficient 0.01, the exchange rate in next period enter positive and significant in the inflation equations with the size of coefficient 0.13, the Liquidity enter positive and significant in the inflation equations with the size of coefficient changing between 0.30 to 0.55, the import enter negative and significant in the inflation equations with the size of coefficient 0.11, Error correction coefficient ecm ( 1) reflects the adjustment speed of output with respect to the oil revenue disequilibrium. Considering the size of coefficient of error correction term (estimated between 0.04 to 0.05) it can be concluded that inflation responds significantly to its disequilibrium ( ecm ( 1) ). Among the linear specifications, the fifth one outperforms the others based on the R2, Akaike (AIC) and Schwartz (SIC) information criteria. Diagnostic test results are presented at the 2 bottom of the Table (3) for each specification. AR (2) stand for the Lagrange multiplier test statistic for autocorrelation in error terms (with two lags), RESET is Ramsey s RESET test statistic for functional form misspecification based on the squares of fitted values, NORM is test statistic of normality of residuals based on the skewness and kurtosis and HET is Heteroscedasticity test statistic. As it can be seen, the obtained results are generally satisfactory. The first to fifth specifications reflect the symmetric effects of positive and negative oil shocks on inflation. But if oil effects are asymmetric, the results of these models may be misleading. As it was explained in previous section, to examine and test the asymmetric effects of oil shocks on inflation, oil revenue changes are divided into positive and 10

5 International Journal of Applied Economic Studies Vol. 1, No. 1 December 2013 negative ones and added as two explanatory variables to the inflation model using residuals technique. Specifications 6 to 13 in Table (3) are estimated decomposition of oil shocks to positive (pos) and negative (neg) ones. Table3: Estimation of model with different specification Variable c (3.63)*** (2.08)** (2.97)*** (3.18)*** (2.99)*** (1.97)** (1.86)** D ( LP( 1)) (0.98) (0.05) (0.83) (0.71) (0.08) (0.12) D (LOIL) (2.14)*** (1.76)* (1.63) (1.46) (1.51) POS (0.99) (0.08) POS( 1) NEG NEG( 1) D (LY ) D (LIM ) IY 0.28 (2.86)*** 0.11 (2.25)*** 0.24 (2.42)*** D (LEX ) 0.08 D( LEX ( 1)) D (LM 2) ECM ( 1) Asymmetric test statistic (1.36) 0.44 (3.35)*** 0.05 (4.52)*** 0.13 (2.10)** 0.30 (2.30)*** 0.04 (4.05)*** 0.08 (1.36) 0.50 (3.93)*** 0.04 (4.19)*** 0.42 (1.90)** 0.24 (2.32)*** 0.01 (0.17) 0.55 (3.89)*** 0.04 (4.04)*** 0.18 (1.04) 0.09 (1.33) 0.05 (0.76) 0.11 (2.34)*** 0.20 (2.29)*** 0.08 (1.36) 0.48 (3.86)*** 0.04 (4.57)*** 0.06 (0.37) 0.03 (0.51) 0.62 (2.63)*** 0.02 (0.19) 0.01 (0.09) 0.34 (2.09)** 0.05 (4.57)*** 0.51 (3.14)*** 0.04 (3.28)*** R AIC SIC DW AR 2 (2) ** ** RESET 5.10** 5.20** 6.62** 6.87** 6.80** 10.78*** 6.66** HET 9.87* NORM ** * 12.23*** 0.31 Notes: tratios in parentheses and ***, **and * respectively show the significance in 1%, 5% and 10% levels. 11

6 Oil Revenues Fluctuations and inflation in Iran Abbas Rezazadeh karsalari, Hassan saberi Table3: Estimation of model with different specification (continued) Variable c (2.87)*** (4.19)*** (4.58)*** (5.91)*** (4.39)*** (4.64)*** D ( LP( 1)) (0.55) (1.43) (1.58) (1.93)** (1.85)* (1.79)* POS (1.72)* (0.86) (0.88) (1.22) (1.14) POS( 1) (0.71) (1.67) (1.71)* (1.74)* (1.70)* (2.94)*** NEG (0.60) (2.44)*** (2.16)** (2.13)** (2.26)*** NEG( 1) (0.10) (0.76) (0.59) D (LY ) (3.01)*** (2.49)*** IY (0.44) (0.33) (4.52)*** (4.89)*** (4.43)*** (4.64)*** IY ( 1) (1.28) (1.76)* D (LEX ) (0.19) (0.38) (0.47) D (LM 2) (3.29)*** (3.46)*** (2.10)** (2.23)*** (2.06)** (2.68)*** ECM 1( 1) (4.03)*** (5.16)*** (3.95)*** (3.99)*** ECM 2( 1) (0.50) (0.03) (0.78) ECM ( 1) Asymmetric test statistic 0.04 (3.87)*** 2.36** 2.87*** 3.40*** 3.59*** 3.24*** 3.52*** 2 R AIC SIC DW AR 2 (2) 4.12* 4.44* 6.39** 8.14*** 9.27*** 5.47** RESET ** 8.31*** 6.44** 6.55** 8.81*** HET ** *** 16.25*** NORM *** 24.45*** 23.77*** 13.87*** Notes: tratios in parentheses and ***, **and * respectively show the significance in 1%, 5% and 10% levels. As it can be seen by adding positive and negative shocks to the inflation equation, in all nonlinear specifications, according to, explanatory variables explain 58 to 73 percent of inflation changes and the negative oil shocks are much more effective than the positive oil shocks contemporaneously according to the size and statistical significance. In all cases, the positive oil shocks are much more effective than the negative oil shocks contemporaneously according to the size and statistical significance. Negative oil shocks have negative and significant effect on inflation in most equations (0.11 to 0.13). The lag of negative oil shocks (based on the coefficient neg ( 1) are not significant. Positive oil shocks have Positive effect on inflation in most equations (0.33) but Positive shocks in most cases are not significant. The lag of positive oil shocks (based on the coefficient pos ( 1) have positive and significant effect on inflation in most equations. Moreover, the symmetry hypothesis implying the equal effects of positive and negative oil shocks is rejected based on Wald test. The Liquidity enters positive and significant in the inflation equations with the size of coefficient changing between 0.30 to 0.57, the coefficients for the investment to output ratio (INV/GDP) in all the specifications are significant and of the expected sign (negative). The investment to output ratio (INV/GDP) also reduces the inflation significantly with the size of coefficient changing between 0.49 to

7 International Journal of Applied Economic Studies Vol. 1, No. 1 December 2013 The estimation results from the above mentioned specifications indicate that longrun positive (ecm1) and negative (ecm2) imbalances also have asymmetric effects on inflation. The size of coefficient of (ecm2), ranging from 0.01 to 0.02 is much less than the coefficient of (ecm1) which is estimated between0.05 to In addition, coefficient of (ecm2) is not significant in any equation, while the (ecm1) has important effects on inflation.among asymmetric specifications; equation 13 enjoys the best base on Akaike (AIC) and Schwartz (SIC) criteria. In most of the equations, the coefficients of the variables of the investment, are significant and of correct sign. The estimated growth equation 13 passes through all diagnostic tests (Heteroscedasticity, Ramsey s RESET test, autocorrelation and normality). In addition, the preferred specification is able to explain 71 percent of changes in GDP growth. Thus 29 percent of production changes are yet attributable to factors that are not included in the model. Due to severe structural changes in the sample period (especially IranIraq War and Islamic Revolution) stability of structural coefficients based on the plot of cumulative sum of recursive residuals (CUSUM) and plot of cumulative sum of squares of recursive residuals (CUSUMSQ) have been used. The plot of CUSUM and CUSUMSQ statistics together with the 5% critical lines clearly indicates stability in equation and residual variance during the sample period (see figure 1 and 2) CUSUM of Squares 5% Significance Figure 1: CUSUM test for parameters stability in the growth equation CUSUM 5% Significance Figure 2: CUSUMSQ test for parameters stability in the growth equation 4. Conclusion Our reading of the evidence is that natural resources are neither curse nor destiny. In other words, we find empirical and historical evidence showing that natural resources do spur economic development when combined with the accumulation of knowledge for economic innovation. This paper analyze the asymmetric effects of oil revenues shock on inflation in Iran as an oil exporting country for the period of using Johansen cointegration test and Error correction mechanism. The results from long run relationships estimations indicate a positive relationship between inflation and oil revenue in the long run. The findings are in line with Dutch disease or resource curse in countries with high dependency to natural resources. In addition the results from the short run estimations indicate that oil shocks have a significant effect on inflation. But the effects of positive shocks are much stronger and longer lasting than the negative shocks. In other words, the relationship between two variables is asymmetric. It means that inflation responds stronger to the positive shocks than to negative shocks. An oil Fund may serve to stabilize the flow of revenue by insulating the Government, and the economy, from revenue shocks that arise from the unpredictable nature of resource extraction and petroleum prices. Instead, this volatility and uncertainty is transferred to the Petroleum Fund, and the State uses a mechanism to limit expenditure. In this way a state can reduce the risk of Dutch disease or volatility in the exchange rate, because revenue is not spent as quickly (or slowly) as it comes. Such funds are often referred to as stabilization funds. Such funds operate in response to external factors, so they could quickly accumulate 13

8 Oil Revenues Fluctuations and inflation in Iran Abbas Rezazadeh karsalari, Hassan saberi revenue, or are rapidly exhausted. Thus, a fund based on contingencies provides less stability, because a state cannot be certain of the annual spending amount that will be available to it, and must expect fluctuations in available revenue. If, instead, a state uses a rule for fund deposits, and withdrawals, which is not affected by externalities, the flow of petroleum revenue can be more stable. REFERENCES Akpan, E. O. (2009). Oil price shocks and Nigeria s Macroeconomy; A Paper Presented at the Annual Conference of CSAE Conference, Economic Development in Africa, 22nd 24th March, Oxford. Arman, A, Aghajari, S.J. (2009), Oil Revenue, Inflation and Growth in Iran: A pre Exchange Rate reform examination of Dutch disease. Quarterly Journal of Quantitative Economics, 6(2), 3762; Behbudi, D, Mamipour, S, Karami, A. (2010), Natural Resource Abundance, Human Capital And Economic Growth In The Petroleum Exporting Countries. Journal Of Economic Development, Volume 35(3); Berument, H, Ta sci, H. (2002), Inflationary effect of crude oil prices in Turkey. Physica A, 316, ; Berument, M.H, Ceylan, N.B, Dogan, N. (2010), The Impact of Oil Price Shocks on the Economic Growth of Selected MENA1 Countries. The Energy Journal, Vol. 31(1), ; Corden, M.W. (1984), Booming sector and Dutch disease economics: survey and consolidation. Oxford Economic Papers 36, ; Cover, J. p. (1992), Asymmetric Effect of Positive and Negative Money Supply Shocks. Quarterly Journal of Economics, Nov, ; Fardmanesh, M. (1991), Dutch disease economics and the oil syndrome: an empirical study. World Development, Vol.19(6); Farzanegan, M.R, Markwardt, G. (2009), The effects of oil price shocks on the Iranian economy. Energy Economics 31, ; Hodrick, R.J, Prescott, E.C. (1997), Postwar U.S. Business Cycles: An Empirical Investigation. Journal of Money, Credit, and Banking 29 (1), 116; Kandil, M. (2000), The Asymmetric Effects of Exchange Rate Fluctuations: Theory and Evidence from Developing Countries. IMF Working Paper WP/00/184; Karras, K. (1996), Why are the effects of money supply shock Asymmetric? Convex Aggregate supply or" Pushing on a string?. Journal of Macroeconomics, Vol.18(4), ; Kornonen, L, Juurikkala, T. (2007), Equilibrium Exchange Rates In OilDependent Countries. BOFIT Discussion Papers 8; Lee, K., Ni, S., and Ratti, R. (1995), Oil shocks and the macro economy: the role of price variability. The Energy Journal, Vol.16 (4), 3956; Loscos, A.G, Gadea, M.D, Montañés, A. (2011), ECONOMIC GROWTH, INFLATION AND OIL SHOCKS: ARE THE 1970s COMING BACK?. Discussion Paper on Applied Economics DPAE/10/01, Universidad de Oviedo; Mehrara, M. (2008), The asymmetric relationship between oil revenues and economic activities: The case of oilexporting countries. Energy Policy 36, ; Mehrara, M, Maki, M, Tavakolian, H. (2010), The relationship between oil revenues and economic growth, using threshold methods (the case of Iran). OPEC Energy Review, Vol 34(1), 114; Mehrara, M, Niki Oskoui, K. (2007), The sources of macroeconomic fluctuations in oil exporting countries: A comparative study. Economic Modelling, 24, ; Mishkin, F. S. (1982), Does Anticipated Aggregate Demand Policy Matter? Further Econometric Results. American Economic Review, 72, ; Sachs, J. D, Warner, A.M. (1995), Natural Resource Abundance and Economic Growth. Harvard Institute for International Development, Development Discussion Paper No. 517a; Stevens, P. (2003), R RESOURC E IMPAC T CU RSE OR BLESSING? Centre for Energy, Petroleum and Mineral Law and Policy; Wu, M.H, Ni, Y.S. (2011), The effects of oil prices on inflation, interest rates and money. Energy 36, ; 14