Simulating the Economic Effects of Allocating Oil Revenues to The Public and Private Sectors in the Context of Economic Sanctions : A Systemic Dynamic Approach

During the last four decades oil revenues are one of the most important sources of government revenue which have a high impact on the economy. The source of oil revenue can be used as a positive lever for development and infrastructure projects of countries due to the impact of sanctions on oil revenues. For a better understanding of how to allocate oil revenues in the Iranian economy, in this study modeling and simulation methods ere followed. It aims to allocate oil revenues to the private and public sectors over a 20-year horizon. Using the system dynamics method and using Vensim Software, the cause-effect relationships and the state and flow of the model are designed and the economic effects are simulated under different scenarios. The simulation performed in this model is done in three modes; The first scenario is the total oil revenues for investment in the public sector, the second scenario is the allocation of all oil revenues in the form of facilities to the private sector through the National Development Fund and finally, the third scenario in which 70% of oil revenues go to the public sector and the rest through the Development Fund. National is allocated to the private sector. The results show that the allocation of oil revenues to the public sector to invest in production and infrastructure projects is a good scenario in the economy in the long run, which has positive economic effects on national production, welfare and investment.