The Symmetric and Asymmetric Effects of Oil Shocks on Macroeconomic Variables in Iran during the Period of 1369-1395

Considering the importance of oil in Iran's economy, in this paper, the effects of long and short-term effects of oil shocks on real GDP, liquidity and inflation were investigated using the VECM model and Granger causality during the period 1369 to 1395. The results of the symmetric model indicate that the effect of oil shock on real GDP and liquidity is positive, but its effect on inflation is negative. The results of the asymmetric model show that the effect of positive oil price shock on real GDP, inflation and liquidity is positive, negative and positive, and the negative impact of oil price on real GDP, inflation and liquidity is negative, positive and negative. The magnitude of the effect of positive oil shocks on real GDP, inflation and liquidity in the long run are far more limited and more than negative oil shocks shocks. The effect of positive and negative shocks on the variables is asymmetric, which means that the response of the variables to positive and negative shocks is in opposite directions, but with different values. In the short run, oil prices are the cause of all variables.Given the asymmetric effect of oil price shocks on macroeconomic variables, it is recommended that the government, over time, reduce the public budget's dependence on oil in order to eliminate the impact of oil shocks on government spending.