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Computable general equilibrium (CGE) models have become a standard tool of empirical economic analysis and were extensively used to assess the impact of trade liberalization by policy analysts. In this study, the effects of imports tariff reduction as a trade liberalization index are investigated on key economic variables using computable general equilibrium approach. The data used in this study are obtained from the social accounting matrix of year 2001 in which parameters of model are calibrated accordingly. Results of simulations show that if the imports tariff rate is cut by 50% and 100% across all sectors, total supply and investment will reduce while total exports, total imports, household income and consumption will increase.

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Exogenous shocks and economic fluctuations led to extensive changes in households’ savings. Changes in household savings can also influence macroeconomic indicators. Thus in this study, the impact of household savings on household Income and GDP are examined using a Computable General Equilibrium (CGE) model. In the literature, there are two static and dynamic general equilibrium models. We apply the Mixed Complementary Problems (MCP) method using the Iran’s time series data. Two different scenarios are considered in this study. In the first scenario, marginal propensity to household savings will be increased twenty percent while in the second scenario marginal propensity to household savings will be decreased by the same rate. Furthermore, we updated and developed a Social Accounting Matrix (SAM) for Iran. The following results are obtained. Using the static model, the results vividly indicate that the urban and rural household incomes have increased 0.31 and 0.5 percent, respectively, through the supply of labor and capital in the first scenario. Moreover, GDP has also increased. The results of the dynamic model in the first scenario show that the rural and urban household income increased by 6.42 percent. However, in the second scenario it declined at the same rate as the first scenario indicating the fact that there is a positive relationship between household income and their savings. GDP has increased on average by 6.41 percent based on the first scenario. In summing up, it is found that by the implementation of the second scenario, the opposite results are obtained.

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Measuring the welfare effects of energy subsidy reform is one of the most essential steps in determining the conditions and scenarios of energy price reform. Therefore, the main goal of this article is to survey how energy price reform affects the welfare of rural and urban households’ income deciles. This research uses the standard computable general equilibrium model based on legislated scenarios approved by Parliament in 2010. In addition, the supportive and income redistribution policies resulting from energy price reform are simulated and analyzed. The results show that rising energy prices leads to reduction in welfare of all urban and rural households especially in the lower income deciles. In addition, increasing energy prices causes more drop in the welfare of rural households in comparison with urban ones. Therefore, the supportive and income redistribution policies resulting from energy price reform under various redistribution scenarios considerably compensate the lost welfare of households.

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In this paper, we try to analyze the effects of oil boom and management of oil revenues by government in a sustainable manner on optimal path of Iranian macroeconomic variables by designing a dynamic computable general equilibrium (DCGE) model. This paper considers several scenarios of utilizing oil revenues in terms of allocating these revenues between savings in the form of oil fund on the one hand and consumption of oil revenues on the other hand. The results show that the a 50 percent increase in world oil price leads to higher optimal level of GDP, but the level of GDP excluding oil exports is reduced. According to the results, the long-term reaction of Iranian economy in the face of permanent shocks of oil price is consistent with the theory of Dutch disease. Due to the Dutch disease, production factors are decreased in tradable sectors and increased in oil and non-tradable sectors. However, the increase in employment in the oil and non-tradable sectors will not compensate for the fall of employment in the tradable sectors, thus total employment will decline. The analysis of oil revenue management shows that saving oil revenue in an oil fund leads to higher level of total consumption and gross domestic product in the long run. Saving oil revenues in an oil fund not only ensures precautionary measures against the so-called Dutch Disease syndrome, but also leads to increase in total employment.