Political Economy of Changes in Speculative Liquidity Rentier Economy: the case Study of Iran during 1974- 2006 period

In this paper we try to provide a simple model for explaining the know-how of changes in "quality" of liquidity in addition to its quantity resulting from the increasing inflow of oil revenues in a rentier economy of Iran. Following
Shakeri, we have expanded Fisher equation by splitting liquidity into two distinct parts.One part of liquidity which is related to variation in GDP that is basically quantitative and the other part which is related to speculative activities and has its own determinants other than GDP. Our period of study is 1974-2006(1353- 1385) .The structure of this paper is as follows: In the first part we shall have a review of literature which is essentially a discussions of quantitative nature of liquidity following oil shocks.In the second part we shall propose an expanded Fisher equation to deal with the case of our study.The third part of our study analysis the findings and discusses the implications and finally in the fourth and the last we conclude our study.