Modeling the effects of oil price and It's production technology shocks on Iran's macroeconomic variables: DSGE approach

The Key Role of the Oil Industry in the Iranian Economy Has Caused the Shocks in This Industry to Affect the Entire Economy. In this Study, We have investigated the Effects of Oil Price and Production Technology Shocks on Macroeconomic Variables by Designing a Dynamic Stochastic General Equilibrium (DSGE) Model. This Model Includes the Household, Firm, Oil, National Development Fund, Government, and Foreign Sectors and the Data of the Years 1352-1396 have been used to Estimate the Parameters. The Results have shown that Oil Price and Technological Shocks have a Positive and Significant Effect on Oil Investment, Employment, Consumption, Government Expenditure, and a Negative Effect on non-oil Investment and GDP. According to Negative Consequence of Oil Price and Technological Shocks on Macroeconomic Situation, Oil Revenue Weaken non-oil Sector. Contrary to Technological Sock, Oil Price Shock has a Negative Impact on Oil Production and Export. The Macroeconomics Mechanism explains that at First Steps Inflation Would Stable Due to the Inflow of Oil Revenues and Increased Imports but then it will Increase Due to High Liquidity.