Oil Revenue Volatility, Sanctions and Mismanagement: Lessons from Iran at the International Iranian Economic Association’s (IIEA) Sixth International Conference on the Iranian Economy in Naples (May 16-17, 2019) hosted by the University of Naples “L’Orientale”.
Abstract: The Iranian economy has been functioning below capacity due to years of economic mismanagement, eight years of war with Iraq, as well as prolonged and at times severe trade and financial sanctions. It is clear that the Iranian economy faces serious challenges and requires fundamental reforms, which can no longer be postponed. To this end Iran needs to adopt a comprehensive package of fiscal, monetary, financial and structural reforms aimed at addressing its inter-related challenges. The policy choices are not easy. That said, the Iranian economy has a lot potential.
Long-Term Growth Effects of Climate Change at the Climate Change and Central Banking Workshop in Ottawa (May 10, 2019), organized by the Bank of Canada.
Abstract: We study the long-term impact of climate change on economic activity across countries, using a stochastic growth model where labour productivity is affected by country-specific climate variables - defined as deviations of temperature and precipitation from their historical norms. Using a panel data set of 174 countries over the years 1960 to 2014, we find that per-capita real output growth is adversely affected by persistent changes in the temperature above or below its historical norm, but we do not obtain any statistically significant effects for changes in precipitation. Our counterfactual analysis suggests that a persistent increase in average global temperature by 0.04°C per year, in the absence of mitigation policies, reduces world real GDP per capita by 7.22 percent by 2100. On the other hand, abiding by the Paris Agreement, thereby limiting the temperature increase to 0.01°C per annum, reduces the loss substantially to 1.07 percent. These effects vary significantly across countries. We also provide supplementary evidence using data on a sample of 48 U.S. states between 1963 and 2016, and show that climate change has a long-lasting adverse impact on real output in various states and economic sectors, and on labour productivity and employment.
Volatility, Macroeconomic Policy and Institutions in Resource-Rich Economies at the Workshop on Macroeconomic Stability and Diversification in Oil-based Economies in Riyadh (April 16-17, 2019), organized by King Abdullah Petroleum Studies and Research Center (KAPSARC).
Volatility and Macroeconomic Policy in the Middle East and North Africa Region at the Symposium on the World Economic Outlook: Implications for Kuwait and the MENA Region in Kuwait (November 12, 2018), organized by the International Monetary Fund (IMF) Middle East Center for Economics and Finance and the Arab Fund for Economic and Social Development (AFESD).
Abstract: In this presentation, I argue that: (1) Volatility is a major problem in the MENA region and macroeconomic policy has not helped. There is a clear role for institutions and the government (fiscal policy) in offsetting some of the negative growth effects due to the volatility curse. (2) The new oil order is a serious challenge for the MENA region, in particular for oil-exporting countries, as lower oil prices weaken domestic demand as well as external and fiscal balances; but also for oil importers, as gains from lower oil prices are offset by a decline in external demand/financing by MENA oil exporters given strong linkages between the two groups through trade, remittances, tourism, foreign direct investment, and grants. (3) The costs associated with climate change volatility in the MENA region are potentially substantial. MENA countries need to act proactively by identifying the related risks to be able to design proper climate policies incorporated into their development strategies and fiscal planning in general.
Sanctions and Upcoming Challenges for the Iranian Economy at a Panel Discussion on the Iranian Economy and Economic Sanctions in London (October 9, 2018), organized by the International Iranian Economic Association (IIEA), London Middle East Institute (LMEI), and Centre for Iranian Studies at SOAS, University of London.
Abstract: Sanctions have, no doubt, harmed the Iranian economy, but one should not underestimate the damage done by years of economic mismanagement. Iran needs a more resilient economy, which implies: strengthened institutions and policy mechanisms which act as shock absorbers in the face of high levels of oil revenue volatility; better conduct of fiscal and monetary policy; growth-friendly fiscal policies as well as structural reforms; private sector investment; diversification; regional development policies should be initiated that give priorities to remote regions that have been left behind.