Analysis the Asymmetric Effect of Oil's Price and Revenue on Unemployment Rate in Iran Application of Asymmetric Model (NARDL)

In this study, it is attempted to study the role of oil price and oil revenue in unemployment rate in a symmetrical (linear) and asymmetric (nonlinear) model for Iran. For this purpose, seasonal data 2001:2 to 2017:4 and ARDL model in linear and nonlinear approach has been used. The results in the linear approach show that the oil price has inverse effect on unemployment rate and the oil revenue has no significant effect. Also, according to the nonlinear approach, in the short run, oil price and oil revenue have an asymmetric effect on the unemployment rate. So that, decreases in the oil prices has a negative effect on unemployment rate and the effect of increases in the oil price is not significant. In terms of oil revenue, the results show that increases and decreases have a reverse effect on the unemployment rate. So that, the first, the magnitude of the effect of increases in the oil income on unemployment is different from the effect of decreases in the oil income, and second, the effect of decreases in the oil income is greater than the effect of increases in the oil income. The results for oil price in long-run is similar to short-run, and only decreases in the oil price have a reverse effect on unemployment rate. In long-run, the impact of oil revenue is unlike to short-run and it's negative. So that the first, asymmetric effect of oil revenue on unemployment rate is confirmed, and second, unlike to short-run, in the long-run, the magnitude of the effect of increases in the oil revenue on unemployment is greater than the effect of decreases in the oil revenue. CPI in the linear and nonlinear approach has a negative effect on the unemployment rate in the short-run and long-run.