Absorptive Capacity of the Prerevolutionary Iranian Economy
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The impact of oil revenues on the Iranian economy during a given time period can be broken down into several independent elements. The first is the response of the government to changes in oil revenues from the administrative side in identifying and implementing areas for expenditure. The second is the production-inducing effect of these expenditures through linkage and spread effects. A third aspect concerns the production of government oil-derived expenditures as measured by the economy's ability or absorptive capacity to utilize them effectively. In Iran's case, because economic development was the principal vehicle for converting oil resources into a continuing stream of real benefits to the country, the estimation of realistic spending levels or the absorptive capacity for oil revenues was undoubtedly the most important decision undertaken by the government.
Journal of Energy and Development, Spring 1983.Refereed Journal Article
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