Differentiating the direct and indirect effects of the oil shock on oil exporting and importing countries: a case study of Iran and European partners

This study analyzes the impact of oil shocks on the economies of oil-exporting and oil-importing countries based on Kurhonen and Lediava (۲۰۱۰). In this study, a system of simultaneous equations is used along with the trade matrix to relate the economies of countries to each other. The sample studied is Iran as an exporter and its European partners as oil importers. In order to clarify the oil shock, three different methods have been introduced, and the best one has been chosen. In the next step, the effects of positive and negative shocks are divided into two direct and indirect parts for each country. For Iran, as a net exporter, the direct effects of positive oil shocks positively affected the GDP growth rate, while the indirect effects of this type of shock were negative. For countries that are net importers of oil, the direct effects of a positive shock on the GDP growth rate are negative, while the indirect effects of these shocks are either positive or not significantly different from zero. Roughly, the effects of negative shocks are opposite those mentioned above. Positive shocks had the greatest direct impact on Iran's economy, while negative shocks had the greatest impact on Italy and the Netherlands.

Keywords:

Oil shock , direct and indirect effects , economic growth , commercial relations.