The Effect of Oil Revenues and Monetary Policies on Income Distribution: A Case Study of Iran

An increase in oil prices lead to an increase in foreign exchange reserves in oil exporting countries and so the power of prescribing these revenues to national economy is increases. The incorrect injection of these revenues leads to Dutch disease in these countries. On the other hand, adopting unreasonable monetary and fiscal policies will increase inequality in these countries. Iran is one of these oil exporting countries so Iran's economy is not exempt of this problem. This study attempts to appear the impacts of money supply on inequality variables in Iranian economy over last years. The results of this study shows that governmental consumes and incomes increases inequality. Furthermore the effects of oil revenues on income inequality are unknown and these revenues decreases income inequality but distribution system decreases this effect and clearly growth rate of money supply increases income inequality.