Investigating the Impact of Energy Security, Food Security, and Exogenous Climate Variable Shocks on Iran’s Economic Resilience: A VARX Model Approach

Document Type : RESEARCH PAPER

Authors

1 Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

2 Economics department,, Faculty of Economics and administrative sciences, Ferdowsi University of Iran, Mashhad, Iran

Abstract

Economic resilience plays an important role in shaping the long-term growth pattern and is a prerequisite for the theory of endogenous growth. Therefore, this study, using the vector autoregressive model with exogenous variables (VARX) and seasonal data from spring 2001 to winter 2023, has examined the impact of energy, food security, and climate exogenous shocks on Iran's economic resilience. The instantaneous shock response function of economic resilience showed that after the energy security shock, it first strengthened, then became negative after a few periods, and then approached the previous equilibrium state. In contrast, after the food security shock, economic resilience increased, and then the positive shock effect was absorbed over time and the system approached a new equilibrium state. Climate shocks also create significant and stable fluctuations in the instantaneous shock response function of economic resilience.
The cumulative response diagram of economic resilience showed that the positive effect of the energy security improvement shock on this variable is not stable and eventually becomes negative. But positive food and climate security shocks have a positive and sustained cumulative effect on economic resilience. The results of the analysis of variance of the forecast error also showed that in the short term, the majority of the fluctuations in economic resilience are explained by internal shocks to this variable. With an increase in the time horizon, the contribution of other variables, especially food security, in explaining changes in economic resilience increases. In a Granger and instant causality test as a complementary tool to accurately identify the communication channels between endogenous VARX variables, only the probability value of the Granger causality test for food security was obtained as 0.0017. This result indicates a significant Granger causality relationship at the 1% level. Therefore, food security disruptions play an important role in predicting changes in economic resilience and energy security. Based on the results of this instant causality test, only the probability value of the instant causality test from energy security to other variables is less than the significance level of 0.05. Therefore, the null hypothesis of no instant causality is rejected.

Keywords

Main Subjects

References

a case study. In Health of People, Health of Planet and Our Responsibility (pp. 121–133). Springer. https://doi.org/10.1007/978-3-030-31125-4_11
Alehile, K. S., Ebeh, J. E., Sani, I. A., & Opaluwa, H. I. (2024). Probing the interplay between climate change and global energy security: Insights from nonlinear analysis. Energy Research Letters, 5(4). https://doi.org/10.46557/001c.94675
Arzhang, P., Abbasi, S. H., Sarsangi, P., Malekahmadi, M., Nikbaf-Shandiz, M., Bellissimo, N., & Azadbakht, L. (2022). Prevalence of household food insecurity among a healthy Iranian population: A systematic review and meta-analysis. Frontiers in Nutrition, 9, 1006543. https://doi.org/10.3389/fnut.2022.1006543
Asia Pacific Energy Research Centre. (2007). A quest for energy security in the 21st century: Resources and constraints. APERC. https://aperc.or.jp/file/2010/9/26/APERC_2007_A_Quest_for_Energy_Security.pdf
Asia Pacific Energy Research Centre. (2019). APEC energy demand and supply outlook (7th ed., Vol. 1). APERC. https://aperc.or.jp/publications/reports/outlook/7th/edition.html
Babayomi, O. O., Dahoro, D. A., & Zhang, Z. (2022). Affordable clean energy transition in developing countries: Pathways and technologies. iScience, 25(5), 104178. https://doi.org/10.1016/j.isci.2022.104178
Bousso, R. (2025, May 19). Lifting U.S. sanctions on Iran could crush China's teapot oil refineries. Reuters. https://www.reuters.com/business/energy/lifting-us-sanctions-iran-could-crush-chinas-teapot-oil-refineries-bousso-2025-05-19/
Briguglio, L. (2014). A vulnerability and resilience framework for small states. In D. Lewis-Bynoe (Ed.), Building the resilience of small states: A revised framework (pp. 10–76). London: Commonwealth Secretariat. https://www.um.edu.mt/library/oar/handle/123456789/18015
Briguglio, L. (2016). Exposure to external shocks and economic resilience of countries: Evidence from global indicators. Journal of Economic Studies, 43(6), 1057–1078. https://doi.org/10.1108/JES-12-2014-0203
Briguglio, L., Cordina, G., Farrugia, N., & Vella, S. (2008) .Economi vulnerability and resilience concepts and measurements, WIDER Research Paper, No. 2008/55, ISBN 978-92-9230-103-3, The United Nations University World Institute for Development Economics Research (UNUWIDER), Helsinki. https://www.econstor.eu/bitstream/10419/45146/1/571437761.pdf
Briguglio, L., Cordina, G., Farrugia, N., & Vella, S. (2009). Economic Vulnerability and Resilience: Concepts and Measurements. Oxford Development Studies, 37(3), 229–247. https://doi.org/10.1080/13600810903089893
Carvalho, R., Buzna, L., Bono, F., Masera, M., Arrowsmith, D. K., & Helbing, D. (2014). Resilience of natural gas networks during conflicts, crises and disruptions. PLoS ONE, 9(3), e90265. https://doi.org/10.1371/journal.pone.0090265
Casadio Tarabusi, E., & Guarini, G. (2013). An unbalance adjustment method for development indicators. Social Indicators Research, 112, 19–45.
https://doi.org 10.1007/s11205 012-0070-4
Du, Z., Zhang, H., Ye, Y., Jin, L., & Xu, Q. (2019). Urban shrinkage and growth: Measurement and determinants of economic resilience in the Pearl River Delta. Journal of Geographical Sciences, 29(8), 1331–1345. https://doi.org/10.1007/s11442-019-1662-9
Edigareva, J., Khimich, T., Antonov, O., & González, J. Q. (2021). Energy security: Key concepts, components, and change of the paradigm. Energy Security and Sustainability, 1–15.
https://doi.org/10.48550/arXiv.2106.16117
Enders, W. (2004). Applied econometric time series (2nd ed.). John Wiley & Sons.
Iranian Energy Association & Wuppertal Institute for Climate, Environment and Energy. (2010). Energy price reform in Iran.
Fang, D., Shi, S., & Yu, Q. (2018). Evaluation of sustainable energy security and an empirical analysis of China. Sustainability, 10(6), 1685. https://doi.org/10.3390/su10061685
FAO. (2006). Food security. FAO’s Agricultural and Development Economics Division Policy Brief, 2, 1–4. https://www.fao.org/fileadmin/templates/esa/Global_persepctives/Policy_briefs/PB_02.pdf
FAO. (2012). At a glance: The role of energy in food security and climate (Energy Smart Food for People and Climate Issues Paper No. 1). Food and Agriculture Organization of the United Nations. https://www.fao.org/4/an913e/an913e01.pdf
FAO. (2018). Strengthening food energy systems for greater food security. Food and Agriculture Organization of the United Nations. https://openknowledge.fao.org/items/442a57e1-98ff-4919-9e5c-3995a3216813
 FAO. (2025). Food security indicators.https://www.fao.org/faostat/en/#data/FS
Feinstein, C. (2002). Economic development, climate change, and energy security: The World Bank’s strategic perspective (Energy and Mining Sector Board Discussion Paper Series No. 3). World Bank. https://documents1.worldbank.org/curated/en/862981468781813700/pdf/280860Econ0dev1ate0change0EMS0no-03.pdf
Ghaffary Fard, M., AbuNoori, A., & Nazari, R. (2022). Economic resilience of OIC member states and the factors affecting it: An approach to maintaining economic security. Journal of Economic Policies and Research, 1(2), 83-112. https://doi.org/10.34785/J025.2022.024 (In Persian).
Gohar, A. A., & Cashman, A. (2016). A methodology to assess the impact of climate variability and change on water resources, food security and economic welfare. Agricultural Systems, 147, 51–64. https://doi.org/10.1016/j.agsy.2016.05.008
Guillaumont, P. (2009). An Economic Vulnerability Index: Its Design and Use for International Development Policy. Oxford Development Studies, 37(3), 193–228. https://doi.org/10.1080/13600810903089901
Haile, D., Seyoum, A., & Azmeraw, A. (2022). Food and nutrition security impacts of resilience capacity: Evidence from Ethiopia. Journal of Agriculture and Food Research, 10, 100423. https://doi.org/10.1016/j.jafr.2022.100423
HokmAbadi, S. H., Falahi, M. A., & Salimifar, M. (2023). The Study of Good Governance Effect on Economic Resilience in the Selected Oil Producing Countries with Emphasis on Corruption Control. Journal of Iranian Economic Development Analyses Alzahra University, 9(2), 219-250. Doi: 10.22051/IEDA.2023.42787.1346 (In Persian).
IPCC. (2014). Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (Core Writing Team, Pachauri, R. K., & Meyer, L. A. (Eds.)). IPCC. https://www.ipcc.ch/report/ar5/syr/
Kahrizi, M., habibi, F., & ghaderi, S. (2025). The Impact of Energy Security on Economic Resilience in MENA Countries. Program and Development Research, 6(1), 39-68. doi: 10.22034/pbr.2025.481525.1457 (In Persian).
Karoliina, R., Jyrki, A., Kalle, A., & Pasi, R. (2023). The elements of resilience in the food system and means to enhance the stability of the food supply. Environment Systems & Decisions, 43(2), 143–160. https://doi.org/10.1007/s10669-022-09889-5
Laraia, B. A. (2013). Food insecurity and chronic disease. Advances in Nutrition, 4(2), 203–212. https://doi.org/10.3945/an.112.003277
Lascano Galarza, M. X. (2020). Resilience to food insecurity: Theory and empirical evidence from international food assistance in Malawi. Journal of Agricultural Economics, 71(3), 936–961. https://doi.org/10.1111/1477-9552.12397
Le, T., & Nguyen, C. P. (2019). Is energy security a driver for economic growth? Evidence from a global sample. Energy Policy, 129, 436–451. https://doi.org/10.1016/j.enpol.2019.02.038
Lütkepohl, H. (2005). New introduction to multiple time series analysis. Springer.
Mazziotta, M., & Pareto, A. (2016). On a generalized non-compensatory composite index for measuring socio-economic phenomena. Social Indicators Research, 127, 983–1003. https://doi.org/10.1007/s11205-015-0998-2
Mazziotta, M., & Pareto, A. (2017). Measuring well-being over time: The adjusted Mazziotta-Pareto index versus other non-compensatory indices. Social Indicators Research, 136(3), 967–976. https://doi.org/10.1007/s11205-017- 1577-5
Mesgaran, M. B., Madani, K., Hashemi, H., & Azadi, P. (2017). Iran’s land suitability for agriculture. Scientific Reports, 7, 7670. https://doi.org/10.1038/s41598-017-08066-y
Mirzaei, H., Sadeghi, H., Assari Arani, A., & Faraji Dizaji, S. (2024). The socioeconomic impact of food insecurity on labor productivity in Iran: Comparative analysis with the MENA region. https://doi.org/10.2139/ssrn.4970833
Miller, C. A. (2013). Energy resources and policy. In Handbook of Energy (pp. 149–166). Elsevier. https://doi.org/10.1016/B978-0-12-417013-1.00009-0
Murendo, C., Sisito, G., & Chirongwe, G. (2023). Resilience capacity, food consumption and socio-economic status in Zimbabwe. Cogent Economics & Finance, 11(1), 2176453. https://doi.org/10.1080/23322039.2023.2176453
Napoli, M., De Muro, P., & Mazziotta, M. (2011). Towards a food insecurity multidimensional index (FIMI). Food and Agriculture Organization of the United Nations (FAO). https://www.fao.org/fileadmin/templates/ERP/uni/FIMI.pdf
Noori, R., Maghrebi, M., Jessen, S., Bateni, S.M., Heggy, E., Javadi, S., Noury, M., Pistre, S., Abolfathi, S., & Aghakouchak, A. (2023). Decline in Iran’s groundwater recharge. Nature Communications, 14(1). https://escholarship.org/content/qt754816mx/qt754816mx.pdf
Liu, L., Meng, Y., Wu, D., Ran, Q., Cao, J., & Liu, Z. (2023). Impact of haze pollution and human capital on economic resilience: evidence from prefecture-level cities in China. Environment, Development and Sustainability, 25(11), 13429-13449. doi:https://10.1007/s10668-022-02625-8
Paravantis, J. A. (2019). Dimensions, components and metrics of energy security: Review and synthesis. SPOUDAI - Journal of Economics and Business, 69(4), 38–52. https://ideas.repec.org/a/spd/journl/v69y2019i4p38-52.html#cites
Pourbagherian, M. (2023). The effect of non-oil exports share on Iran’s economic resilience [Unpublished master’s thesis]. Semnan University (In Persian).
Pourmottaghi Almani,S , Shahabadi,A and Mehregan,N . (2022). The Effect of Total Factor Productivity, Institution and Natural Resources Abundance on Economic Resilience. The Journal of Economic Studies and Policies, 9(2), 36-7. doi: 10.22096/esp.2022.130922.1374 (In Persian).
Raei, H., Maleki, A., & Farajzadeh, Z. (2024). Analysis of energy policy reform in Iran: Energy and emission intensity changes. Economic Analysis and Policy. https://doi.org/10.1016/j.eap.2024.02.023
Sassi, M. T. (2020). The effect of food and energy security on political stability. ScienceOpen Preprints. https://doi.org/10.14293/S2199-1006.1.SOR-.PPIR88T.v1
Shakeri Bostanabad, R., Mahdiar Esmaeli, M. R., & Salehi Komrudi, M. (2022). Investigating the Economic Resilience of Iran's Agriculture sector. Agricultural Economics Research, 13(4), 41-59. doi: 10.30495/jae.2021.20982.2000 (In Persian).
Stiglitz, J. E., Sen, A., & Fitoussi, J.-P. (2009). Report by the Commission on the Measurement of Economic Performance and Social Progress. Retrieved from http://ec.europa.eu/eurostat/documents/118025/118123/Fitoussi+Commission+report.
Tweeten, L. (1999). Public regulation of food and agricultural markets )Working Paper, 1–9(. Department of Agriculture, Environmental, and Development Economics, The Ohio State University. https://www.eolss.net/sample-Chapters/c10/E5-18-01.pdf
Warsono, W., Russels, E., Wamiliana, W., Widiarti, W., & Usman, M. (2019). Vector autoregressive with exogenous variable model and its application in modeling and forecasting energy data: Case study of PTBA and HRUM energy. International Journal of Energy Economics Policy, 9(2), 390-39.  Retrieved from https://www.econjournals.com/index.php/ijeep/article/view/7223
Xu, M., Shi, L., Zhao, J., Zhang, Y., Lei, T., & Shen, Y. (2025). Achieving agricultural sustainability: Analyzing the impact of digital financial inclusion on agricultural green total factor productivity. Frontiers in Sustainable Food Systems, 9, 1345678. https://doi.org/10.3389/fsufs.2025.1345678
Zakari, A., Toplak, J., & Tomažič, L. M. (2022). Exploring the relationship between energy and food security in Africa with instrumental variables analysis. Energies, 15(15), 5473. https://doi.org/10.3390/en15155473
Zhang, J. (2025). Digital economy, green finance, and economic resilience. PLOS ONE, 20(3), e0298456. https://doi.org/10.1371/journal.pone.0298456
Zhang, X., & Tian, C. (2024). Measurement and influencing factors of regional economic resilience in China. Sustainability, 16(8), 3338. https://doi.org/10.3390/su16083338
Zivot, E., & Andrews, D. W. K. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis. Journal of Business & Economic Statistics, 10(3), 251–270.
Stable Economy Journal
Volume 7, Issue 3 - Serial Number 24
October 2026
Pages 169-184

Files

Share

How to cite

Statistics