Economics Research

Abstract This study examines the interaction between the financial sector and the real economy of Iran over the period 1999–2016 using a Financial Social Accounting Matrix (FSAM) and a three-layer analytical framework. The objective is to assess the allocation of financial resources and identify shifts in the functional role of the banking system across service subsectors. The findings indicate a significant reorientation of financial intermediation toward distributive, personal, and social services in 2016 compared to 1999, accompanied by a relative decline in support for productive activities. In 2016, distributive services emerged as a primary destination of bank credit, with multipliers of 3.01 (commodity account) and 3.35 (activity account), while the shares of industry and agriculture decreased. Structural multiplier analysis further reveals that the financial sector’s impact on real sector growth has been transmitted predominantly through less-productive service activities. This allocation pattern has reinforced a service-oriented structure and widened the gap from development objectives, underscoring the need to reconsider credit policies and redefine the role of the financial system in supporting productive growth and sustainable development

Abstract The subject of labor force productivity changes during business cycles has been the focus of much debate among macroeconomics, which has gained less attention among studies focusing on Iranian Economy. In the study, we have aimed at empirically examining the role that labor force productivity fluctuations play during economic cycles in the Iran using time-series data for the period of 2005Q2-2015Q1 by applying an autoregressive distributed lag (ARDL) model. In order to estimate relations, we have separated fluctuation and trend components based on Hodrick-Prescott filter. Based on our results, it is suggested that labor force productivity moves in alignment with GDP and increases in expansion periods and decreases in recession periods which indicate pro-cyclical behavior of labor force productivity in Iranian Economy. Second, in the last seasons of an expansion period, the role of labor force productivity fluctuations decreases in gross domestic product fluctuations which is along with the theory.