Uncertainty, budget deficit and economic growth in OPEC member countries

In this research, the effect of uncertainty and the government budget deficit on economic growth has been investigated in 12 OPEC member countries from 1997 to 2013. Given the structure of OPEC member countries, production uncertainty and oil revenue uncertainty were introduced as the proxy for the uncertainty variable, and the PP-GARCH method was used to estimate the two mentioned uncertainties. To investigate the relationship between research variables, the panel ARDL model was used based on two methods of PMG and MG for without and with uncertainty situations. The results of the research showed that under without uncertainty conditions, the government deficit and tax revenue had a significant negative effect on the economic growth of OPEC member countries. Also, in the uncertainty scenarios, both variables of production uncertainty and oil revenue uncertainty had a significant negative effect on the economic growth of countries in both short and long run.