Volume 12, Issue 3 (2012)
QJER 2012, 12(3): 1-23 |
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Moghimi feyzabadi M, Shahnoushi N. Eliminating the Subsidy on Fossil Fuels and the Effects on Production, Cost and Price Indices in Khorasan-Razavi Province. QJER 2012; 12 (3) :1-23
URL: http://ecor.modares.ac.ir/article-18-4725-en.html
URL: http://ecor.modares.ac.ir/article-18-4725-en.html
1- Researcher of Iranian Academic Center for Education, Culture and Research (ACECR), Mashhad
2- Associate Professor, Department of Agricultural Economics at Ferdowsi University of Mashhad,
2- Associate Professor, Department of Agricultural Economics at Ferdowsi University of Mashhad,
Abstract: (6856 Views)
One of the main inputs in manufacturing sector of Iran is fossil fuels with prices much lower than prices elsewhere in the world which are offered to producers and consumers. This accounts for a large share of subsidy payments allocated to different sectors of economy. The effect of subsidies on energy costs and prices of goods and services incur complex changes on the economy through allocation of resources. In this paper, using the computational general equilibrium model, effects of removal of fuel subsidies on production changes, cost and price in the Khorasan Razavi province has been studied. The results show that the elimination of subsidy on fossil fuels increased production, cost and price Indices. The highest growth rate of production and cost indices is in the gas sector and the highest growth rate of price index is in the oil sector.
Received: 2011/02/12 | Accepted: 2011/10/16 | Published: 2012/09/24
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