Inequality of income and curse of oil resources in Iran

In this research, the nonlinear effects of variables affecting income inequality have been examined, with emphasis on the role of variable resource abundance, so that using the Time Varying Parameter Vector Autoregressive Model (TVP-VAR) and annual data of 2016-1970 periods, The impulse response functions of Gini coefficient which is varying over time is investigated for shocks on the variables, per capita GDP, degree of trade openness, agricultural value added growth and abundance of resource. Based on the results, the effect of the variable resource abundance on the Gini coefficient has been positive on all the studied period and has led to an increase in income inequality. In addition, the positive shock to the variables per capita income and the value added of agriculture had a negative effect on the Gini coefficient and led to a reduction in income inequality. Also, the effect of the trade openness variable on Gini coefficient illuminates the positive effects of trade openness in early periods of influence, so that, the mentioned positive effects have a decreasing trend. Also, the effect of the shock of variables on the Gini coefficient in 1990-1991 is different from that of other years, so that implementation of economic adjustment policy, due to increasing inflation and rising exchange rates, has reduced the positive effects of model variables on income inequality. The results of this study indicate the role of policy approaches of each period in studying the effect of model variables, an issue that highlights the use of nonlinear models.