Oil producing countries and development problems: A case study of the Iranian economy

This paper focuses on the long-run problem facing economies based on exhaustible resources. A planning model is built to examine the intertemporal investment strategies of a typical oil-based economy. The model is applied to Iran as an example of an oil-producing country. The results show clearly that the expansion pressures imposed on Iran during the mid 1970's overheated the economy to the extent that was beyond the control of the economic planners.