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:: Volume 25, Issue 84 (quartery journal of Economic Research and Policies 2018) ::
3 2018, 25(84): 129-164 Back to browse issues page
The Optimal Use of Oil Revenues in Government Budget of Iran in the Context of Permanent Income Hypothesis
Mohamad taghi Fayazi Mr. , Ali Sori Dr, Mojtaba Bagheri Dr
, fayyazi2002@yahoo.com
Abstract:   (622 Views)

In order to establish the sustainable budget in Iran, this paper examines the optimal level of oil exploitation in the state budget during the period leading up to the time of finishing of oil reserves. The governments usually provide a variety of services. Since the Iranian government possesses the intergenerational oil resources, the continuity of these services provision is a vital goal. The results of this study show that with the government's ongoing current policies, the government's budget will be unsustainable, the government current expenditures will account for a large part of the government's public resources, financial assets will not be accumulated, the dependence of the budget on oil revenue will be high, and the government cannot stop relying on oil revenues when oil reserves will be ended. However, by adopting approaches based on the permanent income hypothesis or moderate permanent income hypothesis, while reducing the share of the current expenditures, the government can save some of the oil revenues and create a positive non-oil initial level. In other words, with the end of the state's oil reserves, the government can safely and reliably cut dependence on oil income and finance all the expenditures from non-oil revenues. The approach to the permanent income hypothesis due to the gradual adjustment process will be faced to less tension and less resistance within the community.
 

Keywords: Optimum oil revenues, Sustainable government spending sustainability budgets, Budget balances, Budget deficit  
Full-Text [PDF 1394 kb]   (178 Downloads)    
Type of Study: Applicable | Subject: Special
Received: 2017/06/18 | Accepted: 2018/03/11 | Published: 2018/03/11
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fayazi M T, sori A, bagheri M. The Optimal Use of Oil Revenues in Government Budget of Iran in the Context of Permanent Income Hypothesis . 3. 2018; 25 (84) :129-164
URL: http://qjerp.ir/article-1-1792-en.html


Volume 25, Issue 84 (quartery journal of Economic Research and Policies 2018) Back to browse issues page
فصلنامه پژوهشها و سیاستهای اقتصادی Journal of Economic Research and Policies
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