Marzieh Bahmani; Hosein Raghfar; mir hossein mousavi
Abstract
Macroeconomic fluctuations and demographic changes have led to problems in Iranian retirement funds and lack of sustainability in their resources and expenditures. Because of ageing population and the effect of inflation on depreciation of pension funds’ reserves, it is imperative to carry out ...
Read More
Macroeconomic fluctuations and demographic changes have led to problems in Iranian retirement funds and lack of sustainability in their resources and expenditures. Because of ageing population and the effect of inflation on depreciation of pension funds’ reserves, it is imperative to carry out parametric reforms such as a reduction in the replacement rate. The purpose of this study is to examine the effects of reducing replacement rate on macroeconomic variables. The model used in this research is based on overlapping generations general equilibrium approach with an emphasis on imperfect labor market. Our findings show that ageing population leads to a reduction in interest rate (%4), a shortage of young workers and a rise in wages (%20) in labor market. In Addition, ageing of population will increase the cost of the pension system (%7). A parametric reform of reducing replacement rate (0.2) leads to reduction of pension system costs (%2). It also leads to a reduction in interest rates (%4.8). In long-run, reducing replacement rate leads to increase in capital accumulation and saving.
Hosein Raghfar; Hamid Kurd Bache; Marzie Paktinat
Volume 12, Issue 45 , July 2012, , Pages 143-171
Abstract
Poverty traps as vicious circles preserve people‘s poverty and undermine the poor effort to overcome their own misery. This paper presents an empirical test for a subclass of poverty traps hypotheses. This test is based on the production function to generate multiple equilibrium, while must be ...
Read More
Poverty traps as vicious circles preserve people‘s poverty and undermine the poor effort to overcome their own misery. This paper presents an empirical test for a subclass of poverty traps hypotheses. This test is based on the production function to generate multiple equilibrium, while must be present in the region between the equilibrium. Therefore, increasing returns should be strongest when the economy is transiting between steady state than when it is at or near in one of those steady states. We implement this idea by estimating the degree of increasing returns during growth accelerations and growth transitions for a panel of developing and developed economies using World Bank Industrial data. Results of this study show that economies of scale occur where there is collapse in growth. Nevertheless, there are no criteria to distinguish transitory ranges from non-transitory ones. Although, this assumption confirmed economies of scale in industry result in poverty traps.
