Structural Shocks, Qu & Perron Model, Iranian Economy

Like most of oil exporting countries, Iran’s economy is exposed to the government’s great share of economic activites, complicated monetary and economic policies and a meager activity in production section.Thus a shock in oil price has a significant effect on domestic production, inflation and money. On the proposed model of Qu & Perron (2007), the present study has attented to assess iran’s shocking economic foundations stemed from and exogenous oil price considering production the variables, inflation and money as an affiliated and endogenous variables from march 1961 to february 2012. Accordingly, six structural shocks have been identified in september 1973, july 1979, may 1990, july 1994 & may 2006. The most considerable effect of oil price on production, inflation and money growth were in the first and fifth regimes respectively. Moreover, the longest period of oil price effects on production, inflation and money growth were in forth, second and fifth regimes respectively.