Analysis of Relationship between Per Capita Income Growth, Household Debt and Income Inequality (Case Study: Iranian Provinces)
Volume 18, Issue 69, Summer 2018, Pages 107-132
https://doi.org/10.22054/joer.2018.8865
sajjad Barkhordari, Maede Abdi, Sedige Solgi
Abstract After world recession in 2008, many papers focused on non-linear relationship between debt and growth. Based on traditional theories, a medium level of increase in debt can improve welfare and economic growth, but a high level of it damages the economy. According to recent studies, the non-linear relationship between public debt and growth is conceivable for other debt items such as household debt and firm debt. In this paper, we test the non-linear relationship between household debt and the growth of per capita income in 31 Iranian provinces during period 2005-2015. In addition, we analyses the different threshold points in Iranian provinces related to above-mentioned non-linear relationship. Based on our findings, we accept the hypothesis of reverse-U relationship between debt and growth in addition to the effect of income inequality on heterogeneity of this relationship in Iranian provinces. The results indicate that provinces with high income inequality have high threshold point than regions with low income inequality, but in the latter ones the sensitivity of economic growth to change of debt is higher.
The Impact of Government Spending on Inflation through the Inflationary Environment; Smooth Transition Regression Approach
Volume 16, Issue 60, Spring 2016, Pages 75-105
https://doi.org/10.22054/joer.2016.4202
Mohsen Mehr-Ara, Sajjad Barkhordari, Mohsen Behzadi Soufiani
Abstract This paper examines the nonlinear relationship between inflation and government spending using quarterly data over the period of 1990-2013, by using Smooth Transition Regression model. Our results suggest a two regime model by using inflation, government expenditure growth, GDP growth and liquidity growth as variables of the model, and first lag of liquidity was recognized as transition variable. This study showed that in the regime of tight money or low growth of liquidity, government expenditure is not inflationary. In regime of low liquidity growth, this variable has low inflationary impact and probably stimulates economic growth. Inflationary expectations in this regime are more effective in causing short run inflation. In expansionary regime (high liquidity growth), the increase in money supply has more effects on inflation rather than production. So monetary and fiscal policies could be used to control inflation and stimulate aggregate demand in low regime. Also in easy money regime, monetary and fiscal discipline can be useful for inflation decrease