%0 Journal Article %T Assessing the Iranian Fiscal Sustainability in Past and Future through Tax Side of the Economy %J Iranian Economic Review %I University of Tehran %Z 1026-6542 %A Fathalizadeh, Mahsa %D 2016 %\ 04/01/2016 %V 20 %N 2 %P 187-201 %! Assessing the Iranian Fiscal Sustainability in Past and Future through Tax Side of the Economy %K Keywords: Backward-Looking Approach %K Forward-Looking Approach %K Tax Gap Indicator %K Fiscal Policy Rule %K Markov Switching Model. JEL Classification: E62 %K E63 %R 10.22059/ier.2016.58798 %X This paper, I have focused on the tax side of the fiscal policy to  investigate the past and future behavior of fiscal sustainability in Iran. To do so, I have employed two different forward-looking and backward-looking approaches. First, the backward-looking approach is the fiscal policy rule proposed by Daving & Leeper (2011). Precisely, this rule determines that whether the fiscal policy is active (unsustainable) or passive (sustainable). To estimate the fiscal policy rule, I have exploited Markov switching model (MSM) which examines the tax rate response to debt dynamics under multiple regimes. Second, the forward-looking approach is the modified Blanchard’s tax gap indicator (1990) for an oil-producing country. In fact, this indicator predicts the amount of tax adjustment required to stabilize the future amount of government’s debt back to its value in a particular base year. I have used time series data over the period spanning from 1993(Q1) to 2013(Q4).   %U https://ier.ut.ac.ir/article_58798_619a12aa95c2f5544e07167ac1d30060.pdf