Fatemeh Bazzazan; zahra seifi shahpar
Abstract
The aim of this paper is to evaluate the impact of financial flows on the real side of the economy. FSAM is one of the useful models used to assess those impacts. In this context, the main research question is how the extension of financial flows in the SAM framework, would affect production multipliers? ...
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The aim of this paper is to evaluate the impact of financial flows on the real side of the economy. FSAM is one of the useful models used to assess those impacts. In this context, the main research question is how the extension of financial flows in the SAM framework, would affect production multipliers? For this purpose, by using the Social Accounting Matrix for Iranian economy in year 1999, the resulting Financial Social Accounting Matrix is calculated at the national level, and the real SAM and FSAM multipliers are calculated and compared.
The results show that: 1) FSAM multipliers are greater than SAM multipliers for all accounts, that difference clearly describes the important role of the financial flows in the economy. 2) By increasing one extra unit in each one of the exogenous items, the financial intermediation sector generates the second maximum increase in the income for the factors of production and domestic institutions of the society after the agricultural sector which creates the largest increase in income in the economy. It is also creating the largest increase in the income of labors, that this can be one of the reasons of movement of the factors of production towards the financial intermediation and the growth of the financial sector in comparison to the real sector of the economy. 3) according to FSAM maltipliers results, it can be concluded that the financial system in Iran is a bank-oriented.
