The Challenges of Oil Revenues in Resistive Economics; Consequences and Solutions

Oil price fluctuations in global markets have a significant impact on the economic structure of oil-dependent countries. Resistive economy is to lead to an optimal allocation of resources in a dynamic and sustainable manner during events and crises or on the path to goals. Therefore, the recognition of the direct and indirect consequences of Iran's economy's dependence on oil revenues and its impact on economic variables is very important to have a proper policy in the event of a crisis in line with the resistance economy and reduce the country's economic dependence on oil revenues. In this paper, the three consequences of effective real exchange rate fluctuations, GDP changes and deindustrialization have been evaluated in the framework of vector error correction model. To this end, the VECM method has been used during the period 1991: 01 to 2015: 04. The results indicate that there are three co-integration relationships based on the consequences; as the 10 percent increase in oil prices will increase real exchange rate by 5 percent, GDP decline will be 0.7 percent, and the reduction in the non-trade output ratio to exchangeable production will be 11 percent. Also, the results of the calculations show that the indirect consequences of oil price fluctuations through foreign reserves of the central bank and the ratio of government spending on real exchange rates, through the real exchange rate on GDP and through industrial productivity, affect the non-exchangeable production ratio to exchangeable production.