The Effects of Oil Prices on Macroeconomic Variables of Iran

This paper studies the effects of oil prices on macroeconomic variables such as economic growth, inflation and unemployment rate by using structural vector autoregressive method. The results show that oil price shocks are the main source of fluctuations of inflation rate, while economic growth is affected by supply shock and unemployment rate is affected by shocks in labor market. Also, it is necessary to improve the credibility of monetary and fiscal policies for economic agents to achieve better results.