Designing a Dynamic Macro Econometric Model for the Iranian economy with Emphasizing on dynamics of the National Development Fund

Oil Revenue Management (ORM) has always been one of the key challenges facing the oil rich developing countries. In this regard, the main objective of this paper is to provide a dynamic macroeconometric model adapted to the state of the Iranian economy. Also, the assessment of the dynamics of the National Development Fund (NDF) and its impact on macroeconomic variables are discussed. The results of the study, based on the out of sample and the four scenarios (the existence and absence of the NDF, the change in the share of the fund from oil revenues, the Fund's floating share of oil revenues, and the scenario of the fund exposure with temporary and permanent oil shocks) indicate that, The creation of a NDF in the short term will not improve the situation of macroeconomic variables, and the positive effects of such a policy will appear in the long run. The reason for this the private sector investment was time consuming and, consequently, the increase in non-oil sector production in the economy. Nevertheless, it is possible in the short term that by designing foreign exchange or budgetary policies, the initial downturn in the level of economic activity may be reduced by the stablization of the fund. Moreover, as in the mechanism of the fund, the floating share of oil revenues (adopting an anticyclical policy in allocating oil revenues to the fund) will help to reduce the negative consequences of shocks in the short run, because the lowest initial inflationary pressures, fluctuations in exchange rates and the net debt of the public sector occurs under this scenario.