Fiscal Policy Design in Iran

Over the past several years, the Iranian economy has experienced several significant adverse shocks. Our research shows that one important lesson has been the need for Iran to strengthen its fiscal framework, so that fiscal policy supports economic stability rather than exacerbating the impact of the shock. Many resource-rich countries have fiscal frameworks with features that could serve Iran well. A common feature is a medium-term framework anchored on the non-oil fiscal deficit. Once a medium-term fiscal framework is in place, Iran could also consider adopting a fiscal rule.

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