The Role of Economic Resilience in Adjusting the Negative Effects of Oil Price Fluctuations on The Economic Growth of Iran

Due to its dependence on oil revenues, Iran's economy is greatly affected by the fluctuations of the global oil market, and this effect has mainly been in a negative direction and reduced the economic growth. In fact, the risk of global oil prices has continuously had a negative effect on Iran's economic growth. One of the ways to reduce this negative effect is to increase economic resilience and strengthen it against external shocks. The question that the current research answers is, to what extent does improving economic resilience reduce the negative effects of oil price fluctuations on economic growth? To answer this question, the method of autoregression with distributed lags (ARDL) has been used and the required economic data during the years 1986-2021 have been analyzed. To measure economic resilience, the Briguglio index was used, and the residuals of the univariate Garch model were used to measure the fluctuations of the oil market. The results obtained from the estimation of the model, while confirming the negative relationship between oil market fluctuations and Iran's economic growth, show that in the long term, with the increase of each unit of the level of economic resilience (according to the Briguglio index), the oil price fluctuations on the economic growth rate is reduced by 1 percent, which is a significant amount. Based on this, economic resilience by increasing the level of economic resistance of the country can play an important role in reducing the negative effects of economic risks on economic growth.