A.H Samadi - Assistant professor of Economics, Shiraz University, Shiraz, Iran
Parisa Bahlouli - Young Researchers and Elite Club, Marand Branch, Islamic Azad University, Marand, Iran
Negar Sangsefidi - Young Researchers and Elite Club, Shiraz Branch, Islamic Azad University, Shiraz, Iran.

Oil price volatility is a key factor of many economic crises among oil importers and exporters. Thus, examining the effects of oil price shocks on the economy of oil-exporting, countries is essential. In this study the effects of oil price shocks on GDP by using quarterly data of 1990-2010 were examined. In many studies, the effects of oil price shock on the Gross Domestic Product (GDP) and economic growth have been examined. But, no study has mentioned Markov- Switching Approach for probing this relation in the Iranian economy. This makes our study distinct from others. The results show the asymmetry during the effects of oil price shocks on GDP of Iran. Also, the negative effect of reducing oil price on GDP in Iran is less than positive effect of increasing oil price.

Oil shock, Business cycles, Economic growth, Markov-Switching Approach, GDP