Estimating Composite Vulnerability and Resilience Index of Iranian Economy

The main aim in this research is to introduce the concepts of vulnerability and resilience regarding the quantitative Indices. Vulnerability is a structural characteristic which increases the weak economic points to external shocks. Economic resilience is political ability to resist and recovering from the shocks. In this paper Vulnerability and Resilience Indices are estimated for Iranian Economy concerning the period 1990-2013. The indices are estimated based on three models introduced by Briguglio, & et al.(2008), Boorman, & et al.(2013) and Angeon & Bates(2015) which are compared regarding Construction period (1990-1997), Reforms period (1998-2005) and Kindness period (2006-2013). The results show that the estimated mean of Vulnerability during Kindness period has been higher while the Resilience index during Reforms period has been higher than the other two periods. Also, the growth rate of per capita GNP has indirect relation with vulnerability and direct relation with resilience. Therefore, economic policy modification aiming less reliance on oil income, export diversification and expansion, budget deficit reduction by financial discipline, inflation curbing by increasing efficiency and equity, reducing unemployment by increasing quality of education, plus good Governance(reduction in Corruption, increasing policy stability, quality of regulation, government effectiveness concerning eligibility) with wise performance shall increase resilience and reduce vulnerability.