The Asymmetric Effect of Oil Revenues on the Budget Deficit in Iran: Quantile Regression Approach

The oil revenues and the reliance of oil-rich societies on this source of income, along with volatility of oil price, have had many undesirable and harmful economic effects. In recent decades, the major sources of revenue for the government in iran have been revenues from oil sales. Therefore, volatility of oil price and the change in its sales value always cause volatility in budget and affect the budget deficit. Although little and unsustainable budget deficit can have a positive effect on the activation of the economy, a high and sustained budget deficit will unfavorable effects on economic performance. Using of seasonal data over the period of 1991:2-2016:1, this study investigates the effectof oil revenues on iran's budget deficit. To do so, the research model has been estimated in different deciles using a Ordinary Least Squares regression and Quantile regression. The results indicate that, as oil revenues rises, the budget deficit is increased. On the other hand, there is a non-linear relationship between oil revenues and budget deficits, because as the results of the research show, in primary and last deciles, the effect of oil revenues on the deficit is more than on intermediate deciles.with the implementation of resampling (Bootstrap) as the results estimation quantile regression of the model was confirmed.