Evaluation of The Effect of Increasing Oil World Price on PPI and CPI in Iran by Using Input-output Approach

The crude oil and its products as main resources of the production have main role in the setup of the world countries economy. So, the change of oil price has great impact on the production and consumption costs, and then changes goods and services prices. This paper investigates the effects of oil world price changes through imports price index on goods price and domestic services indices by using VAR models and the data of the years 1980-2014 via input-output table of the year 2006 in Iran. The results obtained upon three scenarios (10, 20 and 30 percent of oil world price increase indicate that, PPI will rise 11%, 21.8%, 32.4% and CPI 9.3%, 18.5%, 27.4% in Iran.