The Effects of Oil Revenues Shocks on Real Non-oil Output

The effects of oil revenue and monetary policy shocks on non-oil output is studied by modelling Long-run output function (using a stochastic differential equation approach) and estimating a partial VAR model (1988:2-2008:3). The results show that a positive oil revenue shock has a negative effect on non-oil GDP in the first period, but increases it in the following periods. Also, the results show that a monetary shock has a small role in explaining output variations. The results are controvetial and need further research.