The effects of electricity tariff liberalization on economic growth in the form of calculable general equilibrium model (CGE)
Subject Areas : business managementAliakbar Mehrabian 1 , Abbas Memarnezhad 2 , Seyedshamsoldin Hosseini 3 , Farhad Ghafari 4
1 - Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
3 - Department of Economics, Allameh Tabataba'i University(Science and Research Branch, Islamic Azad University), Tehran, Iran
4 - Department of Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran.
Keywords: Economic Growth, Liberalization, Electricity industry, Subsidy Targeting, Computable General Equilibrium Models (CGE),
Abstract :
The purpose of this study was to investigate the effects of electricity tariff liberalization on value added and growth of different economic sectors based on designing a general equilibrium model that can be calculated for Iran and using the social accounting matrix in 2011. The government intended to organize the use of energy subsidies in addition to establishing justice in society by implementing the law on targeted subsidies. In this study, the policy of subsidy reform and electricity tariff liberalization has been studied in the form of two scenarios. The first scenario was a 50% reduction in subsidies paid in the electricity sector and the second scenario was the complete elimination of subsidies in the electricity sector. The results of this study showed that the change in electricity tariffs has led to an increase in value added growth in various economic sectors in both scenarios. Meanwhile, the sectors of oil and natural gas, food and electricity supply, water and gas have shown the highest growth in the second scenario compared to the first scenario, and the sectors of construction, wood and paper, non-metallic minerals and other industries.
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