mohammad noferesti

The history of human development shows that tax is a necessity in the economy of countries because it is related to the birth, existence and development of government. Not only is tax an important revenue for a governments budget, but also it is related to economic growth, fair distribution and social stability. For this reason, tax and its determining factors play a prominent role in economic literature. In developing countries due to ever-growing needs of citizens and limited resources, government are facing challenges in fulfilling their developmental programs. This situation is exacerbated by, on the one hand, increasing costs of public services and on the other hand the pressure of public opinions. In such conditions it is highly required to optimize public funds through public policies. Tax revenue mobilization is a major concern in economic policy making in many countries. While some countries have experienced a considerable rise in the rate of tax to GDP, others show little or no increase in long periods of time. In developing countries, it is essential to increase tax revenues in order to provide funds for public investments and public services. In recent years, governments and international institutions have been more interested in increasing  tax capacities. this shows  they have realized that tax capacity is the core of state building and development.
 

Deferent variables may differ from country to country due to the level of development, economic structure and the role natural resources play in government revenue. As tax behaviors highly tend to follow asymmetric and non-linear patters, it is of great significance for policy makers to investigate the existence of these effects in asymmetric patterns. In other words, in high levels of tax revenue, the effect and even the sign of effective variables on tax revenue may be different from that of low levels of tax revenue. These results show beneficial resolutions which help policy makers to determine the optimal tax revenues. Regarding this issue, the aim of this study is to analyze the asymmetric effects of influential factors on tax revenue during 1360-1398 with quantile regression approach.In this article, quantile regression was used to analyze the model. One of the mast important advantages of this method is the deep and thorough insight into response variables. In other words, quantile approach offers a model which makes it possible for variables that influence the dependent variable to interfere not only in the data center of gravity, but also in all distribution sections including its initial and final sequences.Since quantile regression is capable of creating  models for any kind of quantile, it is more resistant to outlier data and heterogeneity than other methods. Prior to model estimation, the volume of underground economy was estimated through , MIMIC so that the related data enters the research model. That was because underground economy is a hidden variable which is not registered in official statistics and there is not any time series about it. Structural equation model shows the relationship between hidden variables and observed variables as well as observed causes which are called MIMIC.
export can be useful.

The results of model estimation show that per capita income has a positive and significant effect on tax revenues. As the model is logarithmic (except for the variable of inflation rate), the effect of coefficients is the concept of tax revenue elasticity. The results of different quantiles include important tips. In low quantiles of tax revenues per capita income or its elasticity on tax revenue has more effect on tax revenue than in high quantiles. In other words, when the government is earning low levels of tax, increasing per capita income has more effect on tax revenues. These results show that in a period when tax revenues decline, governments efforts to improve economic situation and business increase employment, expand production and increase tax revenues. Similar results have been obtained for added value of industry sector in low quantiles of tax revenue, the effect of added value of industry sector on tax revenues is more than that in high quantiles. Increasing added value of industry sector through expanding industrial products increases the exportation of industrial goods and it consequently increases tax revenues. On the other hand, added value of service sector has insignificant effect on high levels of tax revenues and only in low levels of tax revenues its effects are significant in 90% of confidence level. Furthermore, the effect of added value of agriculture sector is insignificant on tax revenue. Foreign trade has a positive and significant effect on tax revenue. Foreign trade growth and imposing tax on import and export increase tax revenue. This effect is more in low levels of tax revenue. Trade is one of the most important sectors that increases tax revenue. By imposing tax on exportation and importation of different goods governments earn huge amount of tax. Oil  revenue has a negative effect on tax revenues. The effect of underground economy on revenues is also negative and significant. This effect is strengthened particularly in case of high levels of tax revenue. Inflation rate has significant effects on tax revenues only in high quantiles of tax revenue. Finally, the effect of government expenses on tax revenues is also positive and significant. This effect is stronger in low levels of tax revenues. Increasing government expenses in different sectors ca have positive effects on production volume as well as increasing employment. Increasing government  expenses leads to increasing tax revenue through income tax on production and business. Following the process of quantile method, in the next stage after estimating the effects, they must be investigated to be determined as symmetric or asymmetric for this purpose, the test suggested by Newey and Powel (1987) was used. The result of this test showed that the effects of GDP per-capita, added value of industry sector, foreign exchange rate and oil revenues are asymmetric. Other variable in this research had symmetric effects on tax revenues.

Due to considerable tax revenues governments earn from foreign trade (Export and Import), they can concentrate on open-trade policies because optimal open trade can have a positive effect on tax revenue. It also can reduce underground economy. Not only do such measures help the country to called tax through import and export, but also, they contribute to economic growth and improving infrastructures. Consequently, tax revenue would increase.  On the other hand, the government should enhance economic reconstruction in order to archive industrialization, renovation and increasing the effect on GDP and consequently earn more tax revenue. Moreover, technology transfer, increasing management capabilities through importing modern machinery, advanced technology and achieving management skills of foreign.

According to the Austrian School of Economics, money creation as the new purchasing power causes a boost in inequality because it is not simultaneously available to consumers. Therefore, imposing restrictions on money creation prevents the increase in inequality. Although assessing moral hazard and creditworthiness is an essential factor in credit supply, "Money Multiplier Theory" also considers it a function of the inflow of reserves and their supply by the central bank. In contrast, according to "Money Creation Theory," reserves are not a prerequisite for creating money. Banks' lack of need for reserves results in passive money creation, which is inelastic to the supply of reserves, and a large amount of it is made up of loans paid to related individuals and close to the bank. Although this kind of lending reduces the cost of evaluating creditworthiness, it provides new purchasing power to a small part of society who have access to new money earlier than others and are not limited to prudential rules such as the loan-to-value ratio. Analyzing the performance of the banking system in the Iranian economy shows that the amount of loans provided to people with a long-term relationship with the bank is beyond the limits specified in the prudential regulations.

The projection of levels and composition of financial resources for the healthcare expenditure (HCE) and relevant trends can provide a basis for future health financing reforms. This study aimed to project Iran’s HCEs by the sources of funds until 2030.

The structural macro-econometric modeling in the EViews 9 software was employed to simulate and project Iran’s HCE by the sources of funds (government health expenditure [GHCE], social security organization health expenditure [SOHCE], out-of-pocket [OOP] payments, and prepaid private health expenditure [PPHCE]). The behavioral equations were estimated by autoregressive distributed lag (ARDL) approach.

If there is a 5%-increase in Iran’s oil revenues, the mean growth rate of gross domestic product (GDP) is about 2% until 2030. By this scenario, the total HCE (THCE), GHCE, SOHCE, OOP, and PPHCE increases about 30.5%, 25.9%, 34.4%, 31.2%, and 33.9%, respectively. Therefore, the THCE as a percentage of the GDP will increase from 9.6% in 2016 to 10.7% in 2030. It is predicted that Iran’s THCE will cover 22.2%, 23.3%, 40%, and 14.5% by the government, social security organization (SSO), households OOP, and other private sources, respectively, in 2030.

Until 2030, Iran’s health expenditures will grow faster than the GDP, government revenues, and non-health spending. Despite the increase in GHCE and total government expenditure, the share of the GHCE from THCE has a decreasing trend. OOP payments remain among the major sources of financing for Iran’s HCE.

The issue of uncertainty and its economic impact is one of the topics that economic researchers have considered in recent years. In conditions of uncertainty, the decision of economic units to produce, consume and invest, etc., is different from normal conditions. This study aims to determine the index of economic uncertainty for Iran according to the channels of its impact on the economy. Therefore, first, the index extraction ratio has been used to measure economic uncertainty. Then, the effect of this index on macroeconomic variables, including private sector consumption and fixed capital formation by the ARDL method, has been investigated. The result is that uncertainty shocks have a significant effect on these variables.

In this article, we have constructed a model with the inclusion of National Development Fund (NDF). The purpose of the model is conducting structural analysis and evaluating economic policies. The model consists of goods market, money market, exchange rate and labor market. The parameters of the model are estimated in the co-integration framework. Th (e annual data used are for the period 1960 - 2018. All behavioral equations are tested for the existence of co-integration by using Pesaran and Shin’s bond test approach. Not only each behavioral equations are confronted with a battery of statistical tests, but dynamic simulations are also used to validate the consistency of the model as a whole. Then, the effect of monetary and exchange rate policies with the help of model was examined under two scenarios: the existence of the National Development Fund (NDF) and its absence. The results show that the existence of the NDF has made the effectiveness of monetary and exchange rate policies in line with the desired gools much more appropriate.

Assessing the impact of a monetary policy through the banking system on the economy is important because the highest share of Iran’s finance market belongs to the banking sector. For this purpose, this research aims to investigate the impact of changing the bank deposit profit rate through the banking system. This paper focuses on the role of deposits as one of the main financing sources of banks in a macro-structural econometric model over the period of 1973-2017.In this respect, focusing on Iran’s banking system; a model was first formulated according to the structure of the Iranian economy. Then, three scenarios, including increasing the profit rate, decreasing the profit rate, and pegging policy, were incorporated into the model to observe the impact of profit rate changes.The results of the simulation reveals a negative relationship between the deposit profit rate and gross domestic product. An increase in the bank deposit profit rate along with increasing the deposits through free credit resources raises credit provision by the banking system, causing a direct impact on investment. On the other hand, implementing this scenario increases the cost of capital and creates an inverse effect on investment. However, the impact of the cost of capital is stronger and leads to a reduction in investment and, consequently, reduces the output by 0.66%.In the scenario of decreasing the profit rate, opposite results are observed, and the output increases by 0.71%. In the third scenario (Pegging deposit profit rate to 17%), however, the output increases by 0.46%. Therefore, the results implies that an increase in the bank profit rate is not confirmed by the theory of McKinnon and Shaw and decreases the GDP.

Banking system is one the important sectors of economy and as vital institution of money market, plays a very significant role. Also, due to the nature of the banking system performance, the activities of banks have a close relationship with the exchange rate changes. This paper tries to assess the effects of exchange rate variations on macroeconomic variables via the banking system using a macro-econometric model and approach of bounding ARDL during 1973-2017. The results indicated that an increase in the exchange rate through non-performance loans and long-term deposits will led to decreased credit providing by the banking system. On the other hand, an increase in the exchange rate through the net open position and banks’ capital account had a positive impact on banks’ credit provision. However, the negative impact of a change in the non-performance loans and long-term deposits is stronger than the positive impact of the net open position. In addition, the decreasing trend of providing credit by banking system had a negative effect on investment. Finally, an increase in the exchange rate causes a decrease in the long-term deposits and the money multiplier which has a negative effect on liquidity and price level. An increase in the exchange rate through the capacity utilitization rate had a negative impact on GDP. Also an increase in the exchange rate led to increased liquidity and price level.

An accurate, and time-based poverty measurement is crucial in future policymaking as well as assessing the impact of welfare policies implemented on poverty. This study has used Multidimensional Poverty Index to calculate the various dimensions of poverty as well as the trend of changes in this index for the whole country and to compare its trend from 2006 to 2018 in all provinces of Iran in both urban and rural areas. These insights provide more accurate images of the location and dimensions of poverty, and they help to illuminate the path for future research on the causes of poverty, and also to design and target the supportive policies more effectively. The results of this paper show that multidimensional poverty in rural and suburban areas is higher than the urban areas, yet it shows slightly decreasing poverty trend. The policy message of this study necessitates a major focus on poverty alleviation in rural and suburban areas.

Since the foundation of National Development Fund (NDF) in 2010 until 2019, more than 100 billion Dollars of oil export revenues are held under its management. The NDF missions are set to finance private investments and save the Nation’s Wealth for the next generations. In this article we have tried to show the economic impact of NDF’s presence in the Iranian economy and asses its success on boosting economic growth and curbing inflation. In doing so, we have constructed a dynamic structural macro-econometric model, consisting of 25 behavioral equations, 7 connecting equations and 62 identities and definitional equations, covering 200 economic variables at the macro level. The parameters of the model are estimated in co-integration concept by adapting the latest achievements in time series analysis. The data used are for the period 1338 - 1396. Dynamic simulations are used to validate the consistency of the model. To assess the impact of NDF's presence in the Iranian economy, we have removed NDF from the model and performed a dynamic simulation for the period 1990 - 1996. Then the results are compared with the case of NDF’s presence in the economy. We found that because of NDF's presence, the GDP growth is 2.2 percent higher on the average, while inflation rate and unemployment rate are on the average lower by 1.5 and 2.1, respectively.

Given the bank centered nature of the financing market in the Iranian economy, the performance of the banking system is very influential in the level of production and cost of goods, and the fluctuation in access to bank credits and increase in the cost of access to it provide a good basis for disruptions economic. One of the problems facing the banking system, especially in recent year, is financial friction, which is evident in indicators such as the ratio of non performing loans, the ratio of fixed assets to total assets and government debt accumulation. In this paper, by the aid build of a structural macroeconometric model in the period of 1967-2015, Has been investigated the effect of the financial frictions on the power of providing credit by the banking system. At the same time, the comparison of the effect of reducing financial frictions with the effect of the expansionary monetary policy on the power of providing credit by the banking system and finally, the comparison of the effectiveness of expansionary monetary policy on the reduction of financial friction with the effectiveness of expansionary monetary policy has been investigated. The dynamic simulation results of the model show that the power of providing credit by the banking system increases by an average of 16 percent, due to the reduction of financial frictions annually by one standard deviation. Also, the effect of reducing financial frictions, in comparison with the effect of expansionary monetary policy on the Power of Providing Credit by The Banking Systemis on average 10 percent higher. In addition, the effectiveness of the expansionary monetary policy on the power of providing credit by the banking System in the event of a reduction in financial frictions as much as one standard deviation is on average 17 percent higher than when fiscal frictions are not reduced.

Human capital is one of the important factors, affecting the relationship between inequality and economic growth. Depending on the accumulation of human capital in the country, the impact of inequality on economic growth will be different. Failure to this channel in theoretical and experimental studies, makes identification error and will lead to misleading results that haven't been considered in the studies by Iranian researchers. In this study we will be examined the impact of inequality on growth in Iran under different levels of human capital, using time series data for the years 1969 to 2014. Data modeling is based on threshold regression that compare to other estimation methods, providing more consistent estimates. The results of the model indicate that in Iran, the impact of income inequality on economic growth has been negative, but the negative effect of inequality on economic growth decreased in line with the maturity of the economy and increase the level of human capital. Also the combined effect of physical capital and human capital on economic growth increased along with levels of human capital and the maturity of economy.

Unemployment is a common but alarming phenomenon in our country's economy that brought about many social and economic problems. The paper attempts to investigate one of the economic harms caused by unemployment that has been less studied. It seems that not only unemployment affects the consumption of unemployed households, but it also affects employed households. in the way that unemployment, as a modifying factor of income expectations, affects household consumption. To study this issue, this article attempted to specify a formula for consumption based on economic theories and estimated its coefficients through using household income-expenditure data provided by the Statistical Center of Iran and employing panel data method. Results indicate that households, in the face of rising unemployment at the community level, reduce their consumption by 1. 5% in response to one percent increase in unemployment rate. Moreover, their share of food consumption increase while the share of nonfood expenditures tends to fall.
JEL Classification: D12، D82، J64، D84، C23

One of the problems that is been facing the Iranian banking system, especially during the 1380s and 1390s, is the financial frictions that is evident in the form of increasing in the non performing loans, government debt accumulation and fixed assets. The existence of These financial frictions, on the one hand, leads to a reduction in the efficiency of the credit market, a reduction in the power of bank crediting and, as a result, firms’ exposure to credit constraint. On the other hand, these frictions cause to decrease the effect of expansionary monetary policy on on the power of the banking system to provide credits. This paper examined the effectiveness of expanding monetary policy tools on providing credit ability of banking system in the presence and absence of financial frictions within a structural macroeconometric model framework for the period of 1967-2015 .The results show that the effectiveness of the expanding monetary policy tools on the credit providing ability of the banking system in the absence of fiscal frictions is on average nearly 60 percent higher than when there are frictions. Therefore, it can be said that the effectiveness of expanding monetary policy tools on the increase in the credit providing ability of the banking system is reduced by almost 60 percent in the presence of financial frictions.

The aim of this thesis is to investigate the effect of changes in population age structure on the budget deficit and forecast its evolution using MIDAS method and time series data during the years 1367 until 1393.One of the criteria for assessing the economic strength of a country is to consider government revenues and expenditure and hence the budget balance. In this paper the effect of changing age structure on government budget deficits will be examined.
To this end a relationship for tax revenues and a relationship for government consumption expenditure is stipulated. For this purpose, we have estimated the corresponding function using the relevant data in the period the first quarter of 1367 to the fourth quarter of 1392. The results show that age structure of population have positive and significant effects on government consumption expenditure and tax revenues and thus budget deficit. Next, we forecasted the consumption expenditure and the government tax revenues for 1393. The budget deficit forecasted by the model is 130063.3 b.Rials for 1393 and compared to its real data which is 131016.1 b.Rials, indicate that the model forecast is satisfactory.

In this study, the allocation of resources of National Development Fund (NDF) to economic sectors in foreign currency and Rial is evaluated by making a structural macro-econometric model that expresses the reality of Iran’s economy as much as possible. This model consists of 45 behavioral equations, 28 connecting equations and 88 identities. Behavioral equations are estimated by the ARDL approach in Eviews 9 software using annual data from 1959 to 2014. According to Theil’s U statistic and root mean square error (RMSPE), the simulation of endogenous variables indicates that model gives a good explanation of Iran’s economy mechanism. Regarding different scenarios for how to allocate resources of National Development Fund to different economic sectors, simulation results over the 2011-2014 period show that if 80% of NDF’s resources is distributed in proportion to the share of sector's investment in total investment in foreign currency and remaining 20% is allocated equally to agriculture and industry sectors in Rial, the highest rate of economic growth will be realized.

Accounting earnings represent corporate performance. Furthermore, one of the main approaches in the voluntary disclosure researches is that managers have private information, which is strategically communicated to investors and analysts via voluntary disclosures like management earnings forecasts. For this reason, the impact of management earnings forecast and accounting earnings (including net income and gross income) in forecasting economic variables were compared with each other. Our sample include 88 largest firm listed on the Tehran stock exchange in years 1385 to 1395 .To answer the research question, various models based on artificial intelligence designed and their results were compared. Results indicate that the particle swarm optimization and genetic algorithm is an effective way in training neural network. The results also indicate that management earnings forecast in line with accounting earnings (net income and gross income) are a useful indicator in predicting economic variables. Overall, this finding emphasizes the importance of accounting variables in macro economic.

In the literature, money demand is usually related to some key variables such as income, interest rate, exchange rate and inflation. But in the societies that population age distribution has changed drastically, age structure is also an important explanatory variable that should be considered in a well defined money demand function. The absence of such variable from money demand function might not lead to a co-integrated equation. Hence the estimated parameters would not be reliable. In this article, by the aid of Ando and Modigliani’s life cycle theory of consumption, three money functions are specified for the components of liquidity that encompasses a variable which represents changes in the age distribution of the society. The specified equations are estimated using time series data for the period 1959 to 2014. ARDL method of estimation is adopted. The results show that by increasing the portion of middle age group in the population, who’s marginal propensity to consume is low, the demand for currency and checking accounts decreases while the demand for time deposits tend to increase.

Economic Growth Depends on Energy Consumption and Due to it any Increase of Economic Growth Led to an Energy Consumption Gain. On The Other Hand Economic Growth is Under The Influence Of Development Of Financial Markets. Therefore Any Development In Financial Markets Will Increase The energy consumption. In This study we use a dynamic panel data and generalized method of moments (GMM) For Selected Oil Base Countries to Analyze a Relationship Between Financial Development and Energy Consumption. Results Indicates That Development of Financial Markets has a Positive Impact on Energy Consumption. Also Money Market has More Influence Than Capital Market On Energy Consumption.

The aim of this paper is to specify and estimate such a model for non-oil export that allows to revise the previous predicted volume of annual non-oil export, as soon as new seasonal data for the explanatory variables are released. This cannot be achieved unless a model is constructed in such a way that annual non-oil export is set as a function of some seasonal explanatory variables. By utilizing a very recent method of regression specification, namely MIDAS regression, this article sets annual non-oil export as a function of seasonal real GDP, seasonal real exchange rate and seasonal real exchange rate fluctuations. To provide more accurate predictions, as compared to traditional methods, this regression model is capable of providing a revised prediction as soon as new information concerning explanatory variables are released. The specified regression model, which is estimated by using time series data within the period 1989 – 2014, predicts the real amount of annual non-oil export for 2015 with a small error of almost 2%. So, this prediction is considered to be very close to the reality.

With homogeneity of human capital, financial institutions in the process of credit allocation, only need to use indices of physical capital, financial strength and credit backgrounds of applicants as the basis for their decision which its consequence is conflicting results in the researches. The new literature, emphasizes the heterogeneity of human capital and explain the existence of a complementary relationship between human and physical capital accumulation and suggests that lack of attention to these aspects, will lead to misleading results. In this paper, we have been studied this relationship in Iran under the premise the heterogeneity of human capital and it has been tested the effect of the combination of human capital and physical capital accumulation on income inequality using threshold regression model. The results over the period 1969-2014 show that, human capital apart from direct effect on income inequality, in combination with physical capital, has a simultaneously separate effect on income inequality.

This paper employs a mixed frequency error-correction model in order to forecast monthly inflation rate for variables sampled at different frequencies. It is shown that the precision of the model is confirmable according to out of sample predictions for months Mehr and Aban of 1395. The model is then used to predict the inflation rate of the month Azar of 1395 for which no data is released yet. The predicted inflation rate, after revising three times as new information become available through time, was turned out to be 8.8 percent.

As compared to worlds Energy consumption data for Iran’s economy shows that in Iran, energy is not used optimally indexes. Increasing energy price is said to be a solution to this problem. But for this solution to work, one crucial condition is that in production process, firms have the ability to substitute energy with other factors. Otherwise, instead of substitution between energy and other inputs (i.e. capital and labor) price increase would occur (inflation). So estimating elasticity of substitution between energy input and capital or labor is very important. In this line, we have specified and estimated a production function for Iran’s economy with constant elasticity of substitution (CES). As in its primary forms, CES production function allows only for two inputs, we have introduced a compound input to have three inputs in our production function. Our estimation, using non-linear methods, showes that in Iran, elasticity of substitution between energy with labor or capital is low, and production technology doesn’t allow firm to substitute energy with other inputs. We can conclude that energy price increase in the short run would lead to inflation and lowers in production level, instead of improving energy usage.

The Iran’s economy is considered to be largely bank oriented in order to finance the economic sectors. In recent years, the increasing trend of nonperforming loans from the 5 percent international standard, due to the increased credit risk of banks, has been reduced from their ability to provide credits and thus has led to credit bottlenecks. This paper, by using structural macroeconometric model in the period of 1967-2015, has investigated the effectiveness of Gap Between Non Performing Loans Ratio and Its National Standard Limit on the macroeconomic variables as well as the effectiveness of expansionary monetary policy in these conditions on macroeconomic variables. The dynamic simulation results greater than of the model show that, in the conditions of the Iranian economy, where the NPL ratio of than 5 percent ratio of the international standard, the power of providing credit by the banking system has decreased by an average of 23.8 percent. By reducing the ability of banks to provide credits, macroeconomic variables such as the utilization rate of production capacities, investment, employment and GDP were on average 2.9, 7.7, 2 and 3 percent have decreased. Also, with the increase in the ratio of nonperforming loans from a level of 5 percent, the effect of expansionary monetary policy on the power of providing credit by the banking system has decreased by an average of 25.6 percent. As a result, the macroeconomic variables including utilization rates of production capacities, investment, employment and GDP, have also declined by an average of 3.2, 8.3, 2.2 and 3.1 percent

In this study، to find the relationship between the government budget deficit and trade balance in Iran، a structural macro-econometric model is set up. In the model، government consumption expenditure increased by 20 percent annually during 2001-2010، so the government budget deficit increased relative to the baseline. The financing methods of budget deficit and relevant effects on trade balance were analyzed in 4 options. The results indicate that government budget deficit increases by adopting expansionary fiscal policy in all options. If the budget deficit is financed by borrowing from the central bank (the first option)، it will raise the monetary base and finally worsen the trade balance and non-oil trade balance compared to the baseline. If the budget deficit is financed by selling participation bonds to the public (the second option)، it will reduce aggregate demand and finally improve the trade balance and non-oil trade balance compared to the baseline. If direct taxes and government spending are increased by the same amount (the third option)، private consumption will decrease; and trade balance and non-oil trade balance will be deteriorated compared to the baseline. Finally، if the budget deficit is financed by the withdrawal of foreign currency reserves (the fourth option)، oil revenues will increase، as a result the trade balance will be improved and the non-oil trade balance will be exacerbated compared to the baseline.

In this paper, a relatively small scale Structural Macro-econometric Model is constructed to study the effect of changes in the US dollar value and the price of oil on trade balance and economic growth of Iran. The model contains 24 long run and short run behavioral equations, 11 connecting equations and 27 definitional equations and identities. Within The methodology of co-integration, all the parameters of the equations in the model are estimated using ARDL technique and time series data for the period 1936 to 2012. The appropriateness of the constructed model is assessed by the related statistical tests and dynamic simulations. The simulation results indicate that when the oil price increase in the world market is due to a US dollar depreciation against other currencies, on one hand, Iran’s dollar revenue increases but on the other hand, imports also increases. Fallowing a jump in the world’s oil prices, yet the general domestic price level tends to increase due to the imported inflation. In all, simulation results show that the increase in dollar revenue due to the depreciation of dollar and hence the increase in oil prices, do not reduce the growth rate of the Iranian economy. Thus, even if it is perceived that an increase in income of the oil exporting countries due to an increase in oil prices will reduce their economic growth rate, the results of this study show that when this income increase is achieved through the depreciation of dollar, the economic growth of the Iranian economy will not decrease.