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The main purpose of this paper is to investigate the dynamic effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2

The main purpose of this paper is to investigate the dynamic effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2 using the time-varying parameter vector autoregressive (TVP-VAR) model. The dynamics of the results enable us to study the amount and severity of the impact of the oil price shocks on inflation with the distinction of the sanctioned and non-sanctioned periods. The volume of oil export is used to identify the effective oil sanctions. The period is divided into sanctioned and non-sanctioned periods by Markov switching model.

The results show that the pass-through of oil price shocks into Iran’s inflation are time-varying, and there are significant differences at sanction period from other time horizons. An increase in oil price has a positive effect on inflation and its effects are stronger during the sanctions period. It is also observed that the producer price index is more sensitive to changes in the oil price than the consumer price index. The necessity of the government’s earnest efforts to improve international relations to lift the sanctions, along with diversification of exports, and making the economy of Iran independent of oil revenues is obvious.

In addition to the exogenous oil price shocks, Iran’s economy faces numerous restrictions for its oil exports due to the sanctions. The main purpose of this paper is to investigate the dynamics effects of the oil price shocks on Iran’s inflation in the period 1993:2–2018:2 using the time-varying parameter vector autoregressive (TVP-VAR) model. The dynamics of the results enable us to study the amount and severity of the impact of the oil price shocks on inflation with the distinction of the sanctioned and non-sanctioned periods. The volume of oil export is used to identify the effective oil sanctions.

Global imbalances and financial crisis discussed in the preceding chapters were not the only contemporary issues that shaped the current and future landscape of the world economy. Since 2004, many countries also felt a significant shock prompted by a surge in the oil price, forcing them to look for the appropriate policy response that would produce least pain and minimum impact on welfare. The fact that oil remains an important source of energy for many countries, developed and developing alike, a price surge can trigger a new round of global conflicts. Indeed, from the hording of grain in Neolithic times to rivalry over resources in the interimperial wars of the 16th–19th centuries that laid the groundwork for World War I, and to modern nations warring over oil, competition and the desire to have a control over the possession of critical sources of vital materials had always been at the center of conflicts from the very beginning of human story. To prop up their industrialization, for a long period of time developed countries had relied on a stable supply of oil, making their political and strategic relations with oil-producing countries so critical, yet fragile and crisis prone. Conflicts and wars over oil were fought among the oil-producing countries as well.¹ Although it was not admitted by the U.S. administration, at least not publicly, the desire to have greater control over oil was also the primary reason for the 2003 U.S. invasion of Iraq.

The objective of the paper is to put the energy sector challenges in perspective and to provide a general understanding of sector management issues.

The paper follows an analytic‐deductive method to analyse the issues using existing literature as the source of information. Starting with an analysis of the evolution of the sector, the paper identifies various present and future challenges facing the sector and indicates the management issues that could emerge.

As future developments are shaped by the past and present, it is important to identify and understand the drivers that could bring profound changes. The dynamic nature of the sector brings new challenges and a better understanding of the present issues could help prepare for the future.

The paper focuses on the broad, generic coverage of the issues and is not intended to provide country specific or industry specific issues and challenges.

The paper presents the multi‐dimensional interactions of the energy sector and offers an analysis of the multitude of sector management issues.

Based on ethnographic fieldwork carried out among market sellers in Equatorial Guinea’s capital Malabo at the height of its oil-boom in 2010–2012, this paper explores how prices were negotiated and set. It describes how the marketplace constitutes an important institution in Guinean society, not only as a site for provisioning, but also as a space for fostering relationships, engaging in politics and seeking social justice. The case of Equatorial Guinea helps us to re-think the notion of the just price as it is established through contingent and negotiated relations between traders, their customers and powerful political actors, rather than being the outcome of supply and demand or the result of struggles over the production and reproduction of labour. The emphasis on the political dimension of the just price speaks to key debates in the moral economy literature.

This paper aims to provide a quantitative assessment of the broad economic effects of tax policy reform in the Kingdom of Saudi Arabia (KSA).

Using a dynamic computable general equilibrium (CGE) model of the KSA, three simulations are run. The first simulation is the baseline simulation, which generates growth paths of the Saudi economy in the absence of tax reform. In developing the baseline simulation, this study incorporates forecasts from the International Monetary Fund. The remaining simulations are policy simulations. A policy simulation deviates from the baseline simulation in response to a policy change. In the first policy simulation, this study introduces a value-added tax (VAT) that generates SAR 35bn. This study assumes budget neutrality with the additional tax revenue transferred to households via a lump sum payment. In the second policy simulation, this study introduces a corporate income tax that generates SAR 35bn. This study then calculates and compares the distortion these taxes introduce into the economy.

This study finds that although the introduction of new taxes increases government tax revenue, markets are distorted lowering efficiency and production. An introduction of VAT increases the cost of consumption relative to the cost of production. As a consequence, the real cost of labour increases lowering employment in the short run. Employment moves to the baseline, as wages adjust capital and real gross domestic product (GDP) is below base throughout the simulation period. The second simulation is an increase in the corporate tax rate with lowers the post-tax rates of return investors receive. This simulation shows that the negative impact on investment, capital and GDP is larger with the introduction of a corporate tax than with the VAT.

Literature focusing on tax policy reform in the Gulf Cooperation Council and, specifically, Saudi Arabia is limited. This paper contributes to the literature by focusing on the following: understanding the impact and mechanisms through which changes in taxation impact the economy more generally; understanding the potential harm caused to allocative efficiency and production due to taxes; and ways in which fiscal reform might complement other reforms such as efforts to diversify the economy, labour market and energy price reforms. This improves the information base available to policymakers charged with designing an optimal tax system that meets all future requirements of a country such as the KSA.

The authors developed and applied a CGE model for the KSA to analyse the impact of VAT and corporate tax on the Saudi economy. To the best of the authors’ knowledge, there are no recent CGE models for Saudi Arabia that have been used for tax policy or quantifying the potential harm to the economy when new taxes are introduced.

The case has been used in a first-year required course called Global Economies and Markets in a module on monetary policy. On October 24, 2005, President Bush nominated Ben S. Bernanke to be chairman of the board of governors of the Federal Reserve System for a term of four years along with a 14-year term on the board of governors. With the U.S. Senate confirmation widely anticipated, Bernanke was expected to take over stewardship of the U.S. monetary policy from Chairman Alan Greenspan when he retired in January 2006. While the U.S. economy was in good shape at the end of 2005, Bernanke had to prepare to deal with two challenges when charting a course for managing U.S. monetary policy. First, the sharp rise in energy prices that began in 2002 had the potential to bring back the specter of inflation and dampen desired consumer and business spending. Second, the housing boom could turn into a housing bust, throwing the mortgage industry into turmoil and weakening consumer business confidence. There was also the possibility that the housing bust could affect broader financial markets. Bernanke had to consider his options for dealing with contingencies in the not-so-distant future.

The issue of export instability exerts an enduring fascination for economists with an interest in the area of economic development. Over several decades a voluminous literature has emerged embracing debates on the domestic consequences and on the causes of export instability. The purpose here is to examine these debates and an attempt is made to set out different theoretical stances, to classify and examine empirical findings, and to indicate the directions in which the debates have moved. Such a statement of a review article's purpose is, of course, incomplete without more specific delineation of the boundaries within which the general objectives are pursued. Here that delineation has three facets.