The Relationship between Oil Revenues Uncertainty and Commodity Import in Iranian Economy

Oil revenues uncertainty influences imports. The paper investigates the effect of oil revenues uncertainty on import in Iran using seasonal data for the period 1369-1390. To measure oil revenues uncertainty, an index is constructed by applying Generalized Auto Regressive Conditional Heteroscedastic (GARCH). The relationship between oil revenues and commodity import is estimated using an Auto Regressive Distributed Lag Model (ARDL). The results show that in the long run oil revenues and oil revenues uncertainty have positive and significant effect on import. Also relative price of imports has a negative and significant effect on import. The elasticity of import with respect to oil revenues uncertainty, oil revenues and relative price of imports are 0.17, 0.37 and (-1.1) respectively. The coefficient of Error Correction Model (ECM) is (-0.42) that indicates 0.42 of import deviation with respect to its long run equilibrium quantity is adjusted in each period.