The Optimum Oil Revenue in Iran

The purpose of this paper is finding the optimum oil revenue in Iran economy. To do so, first we divide Iran‟s economy into two sectors namely, public and non-public sector based on Ram model. Then we specified a nonlinear modified Ram model on explain the role of oil revenues on economic growth in Iran. The results indicate that there exists a threshold the share of oil revenue in GDP of 0.021. In other words, when the share of oil revenue in GDP is less than 0.021, economic growth is promoted, but when the share of oil revenue in GDP is larger than 0.021, economic growth is damaged. Therefore, the optimum oil revenue divided by GDP is 0.021.