anahita roozitalab; esmaiel abounoori
Abstract
Education, as a key indicator of human development, plays a decisive role in reducing social and economic inequalities. Unequal access to education exacerbates income disparities. The primary objective of this research is to examine the impact of different educational levels on income distribution inequality ...
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Education, as a key indicator of human development, plays a decisive role in reducing social and economic inequalities. Unequal access to education exacerbates income disparities. The primary objective of this research is to examine the impact of different educational levels on income distribution inequality in Iran, using data from the Household Expenditure (Income) Survey (HIES) from 1984 to 2023. In this study, households were categorized based on the educational attainment of the head of the household. Subsequently, the Gini coefficient of income was calculated separately for each educational level. The effect of educational inequality (measured as the standard deviation of educational expenditures) on income inequality within each educational category was examined using an econometric panel ARDL model. Control variables, including mean household expenditures and the unemployment rate within each educational group, were also incorporated. The results indicate that inequality in access to education, as well as the unemployment rate, both significantly and positively intensify income inequality. Conversely, the mean household expenditure within each educational period had a significant mitigating effect on income inequality. Furthermore, the findings reveal that educational inequality in Iran has followed an increasing trend over time, reaching its highest level in recent years. Based on the results of this study, it is recommended that the government adopt appropriate policies to reduce educational inequality and enhance access to higher education for all members of society, particularly low-income groups.
Esfandiar Jahangard; Alireza JAHANGARD
Abstract
The aim of this article is to decompose the value-added of Iran’s gross exports in relation to different groups of major countries worldwide. For this purpose, four different methods have been used: the methods of Koopman et al. (2014), Wang et al. (2013), Miroudot and Ye (2021), and Borin and ...
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The aim of this article is to decompose the value-added of Iran’s gross exports in relation to different groups of major countries worldwide. For this purpose, four different methods have been used: the methods of Koopman et al. (2014), Wang et al. (2013), Miroudot and Ye (2021), and Borin and Mancini (2023). Applying these various methods to decompose the value-added of Iran’s gross exports leads to different results, especially concerning the issue of “double counting” in Iran’s economy. Therefore, this article focuses on the source-based decomposition method and the exporter-country perspective, as proposed by Borin and Mancini (2023), and draws on the empirical studies of Borin and Mancini (2023) and Feás (2023).The main findings of this article can be summarized in four areas:First, providing a brief review of the calculations using different methods for decomposing the value-added of Iran’s gross exports;Second, using the multi-country input-output database for the year 2016, with a focus on Iran as empirical documentation;Third, emphasizing the theoretical framework of Borin and Mancini (2023) among the proposed theoretical frameworks, using a source-based approach and the exporter-country perspective;And finally, fourth, offering recommendations to policymakers for adopting strategies that increase domestic value-added, reduce vulnerability to external shocks, and promote sustainable economic growth.The results show that Iran has a very weak role in global value chains.
Behzad Sadeghvand; Hassan Heidari; Mehdi Nejati
Abstract
Iran simultaneously faces the dual challenges of economic sanctions and escalating environmental concerns. This study aims to examine how oil export sanctions contribute to increasing carbon dioxide (CO₂) emissions across various economic sectors. Using the dynamic GTAP-E-Power model—a ...
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Iran simultaneously faces the dual challenges of economic sanctions and escalating environmental concerns. This study aims to examine how oil export sanctions contribute to increasing carbon dioxide (CO₂) emissions across various economic sectors. Using the dynamic GTAP-E-Power model—a computable general equilibrium (CGE) model tailored for energy and environmental analysis—the impact of sanctions is assessed under three oil export reduction scenarios: 60%, 65%, and 70%. Results indicate a consistent increase in Iran’s total CO₂ emissions under all scenarios, with emissions rising further as the severity of sanctions intensifies. Sectoral analysis reveals that electricity production and distribution, low-tech manufacturing, base-load fossil fuel power generation, and petroleum refining are the most affected, showing substantial emission increases. Conversely, sectors such as renewable-based electricity generation and high-tech manufacturing either experienced a decline or only a marginal increase in emissions. These findings suggest that sanctions not only impact Iran’s economy but also exacerbate environmental degradation. Accordingly, the study recommends prioritizing the removal of sanctions as a macro-level policy objective, enhancing investment in oil extraction with modern technologies, expanding renewable energy infrastructure, and supporting high-tech industries that demonstrate greater resilience to sanctions and lower environmental costs.IntroductionIran is concurrently grappling with widespread economic sanctions and escalating environmental challenges. Among these, the impact of oil export sanctions on carbon dioxide (CO₂) emissions stands out as a critical concern. This study investigates the extent to which sanctions, particularly those reducing Iran's oil exports, exacerbate environmental degradation. Employing a computable general equilibrium (CGE) model—specifically, the dynamic GTAP-E-Power model—this study assesses CO₂ emissions under three scenarios of oil export reduction: 60%, 65%, and 70%. The results reveal a direct correlation between intensified sanctions and increased CO₂ emissions, emphasizing the environmental costs of economic isolation.Methods and MaterialsThe study utilizes the GTAP-E-Power model, a dynamic extension of the Global Trade Analysis Project framework, tailored to incorporate power sector and energy-related emissions. This model facilitates the analysis of environmental impacts resulting from shifts in economic and energy-related variables. The analysis simulates three scenarios wherein Iran’s oil exports are reduced by 60%, 65%, and 70%, respectively, over the period from 2019 to 2050. The model estimates CO₂ emissions across various economic sectors under these constrained export conditions, comparing them to a baseline of unrestricted oil trade.Results and DiscussionThe simulation results indicate a consistent increase in CO₂ emissions within Iran as oil export sanctions intensify. Specifically, emissions rise by an average of 0.187%, 0.193%, and 0.197% in the three respective scenarios. Conversely, sanctioning countries experience a decline in their own CO₂ emissions, likely due to increased adoption of clean energy alternatives.Sectoral analysis reveals that electricity production and distribution, low-tech industries, fossil fuel-based power generation, and oil product manufacturing are the most affected sectors. These sectors exhibit the highest CO2 emission increases, with emission intensity growing alongside the severity of sanctions. In contrast, sectors relying on renewable energy and high-tech industries display minimal or even negative emission growth, highlighting their resilience.Electricity generation using fossil fuels under base load conditions sees annual average CO2 increases of 0.602%, 0.641%, and 0.677%, while peak load shows slightly lower increases. However, renewable-based electricity generation demonstrates minimal or negative changes: +0.015% and +0.08% in the first two scenarios, and -0.001% in the third.Moreover, low-tech and medium-tech industries show significantly higher increases in emissions than high-tech industries, which remain relatively unaffected due to their access to advanced and efficient technologies. Similarly, sectors such as mining, coal, agriculture, and services all showConclusionThe findings underscore the substantial environmental costs of oil export sanctions on Iran. Sanctions lead to increased reliance on carbon-intensive industries and outdated technologies, thereby elevating national CO₂ emissions. In contrast, high-tech sectors and renewable energy-based power generation exhibit greater resilience.Key policy recommendations include:Prioritizing the removal of international sanctions to mitigate environmental and economic damage.Investing in oil product manufacturing with access to cleaner, advanced technologies.Expanding renewable energy sources in electricity production to reduce fossil fuel dependency.Strengthening high-tech industries to enhance technological resilience.Focusing development on sanction-resilient sectors, particularly those capable of maintaining efficiency and environmental standards under constrained conditions.Strategic investments in clean technology and the facilitation of knowledge transfer are vital to offsetting the negative environmental consequences of continued sanctions.
Mostafa Kazemi Najafabadi; Ahmad Ali Rezaei
Abstract
While individualism is often perceived as a negative factor that undermines social ethics and reduces participation in charitable activities, this study proposes the hypothesis that individualism—as a set of cultural values and norms that place the individual at the center of decision-making ...
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While individualism is often perceived as a negative factor that undermines social ethics and reduces participation in charitable activities, this study proposes the hypothesis that individualism—as a set of cultural values and norms that place the individual at the center of decision-making and social responsibility—can play a positive role in enhancing the level of generosity in society. Accordingly, two mechanisms are examined: a direct mechanism, where individualism fosters personal motivations for helping others, and an indirect mechanism, in which individualism promotes economic freedom, thereby facilitating the growth of charitable activities. To empirically test this hypothesis, the Autoregressive Distributed Lag (ARDL) model was applied using quarterly data from Iran over the period 2010 to 2021. The results indicate that individualism has a positive and significant effect on the level of generosity; specifically, a one-percent increase in individualism leads to a 0/43 percent rise in generosity. Furthermore, economic freedom also shows a positive and significant effect, with a coefficient of 1/16 percent. The findings support both proposed mechanisms and suggest that individualism, when properly institutionalized within Iran’s cultural context, can strengthen ethical behaviors such as generosity. Additionally, the variables of economic growth, income inequality, education level, and government size were found to have positive effects, while corruption showed a negative effect on the level of generosity in Iranian society.IntroductionCharitable giving is often considered a reflection of social solidarity and ethical responsibility within a society. Conventional wisdom suggests that collectivist cultures are more likely to foster altruistic behavior, while individualism is frequently associated with self-interest and reduced social cohesion. However, recent perspectives argue that individualistic values—by empowering personal responsibility—can also encourage prosocial actions such as charitable giving. This study focused on the Iranian context, where cultural transitions and economic fluctuations have created a unique environment for examining how individualism interacts with generosity.Methods and MaterialsThis study adopted a quantitative, longitudinal research design using quarterly time-series data from 2010 to 2021. The statistical population consisted of national economic and social indicators related to charitable giving in Iran. To examine the role of individualistic social norms in the level of charitable giving in society, following Kai et al. (2022), the following regression model was estimated:Philanthropyt = c0 + c1 Individualismt + c2 GDPt + c3 Freedomt + c4 GINIt + c5 Educationt + c6 Corruptiont + c7 Government sizet + etDependent Variable:Level of Philanthropy in Society (Philanthropy): To measure the level of generosity in society, the World Giving Index was used. This index is based on three components: helping a stranger, donating money, and volunteering time, which are measured using random sampling across different countries. Higher index scores indicate more altruistic behavior as a result of increased generosity. Data for this variable were extracted from the World Giving Index reports.Independent Variable:Individualism Index (Individualism): The level of individualism across countries was assessed using Hofstede's Individualism–Collectivism Index (2001), which reflects the degree of individuals’ integration into social groups. In individualistic societies, people tend to form looser bonds and assume responsibility for themselves and their immediate families. In contrast, collectivist societies feature stronger and more supportive in-group relationships. However, in this study, the focus is on a specific form of individualism, which is not equated with selfishness or social indifference, but is rather viewed as a set of ethical and cultural norms that place the individual at the center of social action. Therefore, while Hofstede’s index was used as the measurement tool, the emphasis was placed on the role of personal values and responsibility in prosocial behavior and generosity, particularly within the cultural context of Iran.Overall, the Individualism–Collectivism Index measures the extent to which a society endorses and promotes individualistic values as opposed to collectivist ones, ranging from 0 (most collectivist) to 100 (most individualist). Data for this variable were obtained from the World Values Survey database.Control Variables:GDP per capita (GDP): Measured based on the growth rate of per capita Gross Domestic Product. Data were extracted from the World Bank’s WDI database.Economic Freedom (Freedom): Defined and measured according to the Heritage Foundation’s Index of Economic Freedom.Income Inequality (GINI): Measured using the Gini coefficient. Data were sourced from the World Bank’s WDI database.Education Level (Education): Measured by the rate of higher education graduates in the country. Data were obtained from the World Bank’s WDI database.Corruption (Corruption): Measured based on the Control of Corruption Index. Data were sourced from the World Bank’s WDI database.Government Size (Government size): Defined as the share of government consumption expenditures in GDP. Data were extracted from the World Bank’s WDI database.Data were collected from official national and international databases. The Autoregressive Distributed Lag (ARDL) model was applied to estimate both short-term and long-term relationships between variables. The analysis investigated two causal pathways: a direct mechanism through which individualism influences personal motivations to donate, and an indirect mechanism where individualism affects generosity by enhancing economic freedom.Results and DiscussionThe results of the estimated model indicate that the variables of individualism, economic growth, economic freedom, income inequality, education level, corruption, and government size have significant effects on the level of charitable giving in Iran. Specifically, a 1% increase in individualism leads to a 0.43% rise in generosity, which is statistically significant at the 1% level. Additionally, a 1% increase in economic growth and economic freedom results in increases of 0.004% and 1.16% in generosity, respectively—both significant at the 1% level. Income inequality and government size also have positive and statistically significant effects of 0.85% and 0.87%, respectively, on generosity, at the 1% significance level. Moreover, education level has a positive effect of 0.28% on generosity, which is significant at the 5% level. In contrast, corruption has a negative effect of 0.34% on the level of generosity, significant at the 1% level.The empirical results supported both proposed mechanisms. Individualism showed a statistically significant positive effect on the level of charitable giving, indicating that personal responsibility and autonomy can enhance generosity. Economic freedom also positively influenced charitable activities by enabling a more supportive institutional environment. In addition, economic growth, higher education levels, reduced income inequality, and greater government size were positively associated with generosity, while corruption had a strong negative impact. These findings challenge the conventional assumption that collectivism is inherently more charitable and suggest that individualism, when properly contextualized within the cultural framework of Iran, can reinforce ethical norms and civic responsibility. The study contributes to a nuanced understanding of the cultural determinants of prosocial behavior in developing countries.ConclusionThe findings of this study challenged the traditional notion that individualism undermines prosocial behavior by revealing its positive role in promoting charitable giving within Iranian society. When institutionalized within the cultural framework, individualism encouraged personal responsibility and voluntary generosity, both directly and through the enhancement of economic freedom. The research concluded that individualism, rather than being inherently detrimental to social ethics, can foster civic engagement and ethical behavior when supported by appropriate economic and institutional structures. These insights highlight the importance of considering cultural values in policy-making aimed at increasing philanthropic activities in developing societies.AcknowledgmentsThe authors would like to express their gratitude to the editorial board of the journal for their support and consideration.
Shahryar Zaroki; Ahmadreza Ahmadi
Abstract
Crude oil and the rents derived from it can present both advantages and disadvantages for oil-rich countries. Numerous studies have examined the impact of oil rents on various variables such as economic growth, inflation, and financial development. Among these, the potential role of oil rents in ...
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Crude oil and the rents derived from it can present both advantages and disadvantages for oil-rich countries. Numerous studies have examined the impact of oil rents on various variables such as economic growth, inflation, and financial development. Among these, the potential role of oil rents in income inequality, particularly in light of the underground economy, appears to have been overlooked in previous domestic studies. To address this gap, the present research first calculates the relative size of the underground economy using a MIMIC method, revealing an average of 16.8% in Iran’s economy. Subsequently, employing a nonlinear autoregressive distributed lag (NARDL) approach, the study investigates and tests the effect of oil rents on income inequality while considering the underground economy over the period from 1978 to 2022. The long-run results indicate that positive shocks in oil rents are associated with a desirable (negative) effect on income inequality, while negative shocks lead to an undesirable (positive) effect. Furthermore, the underground economy acts as a double-edged sword; that is to say, an increase in the relative size of the underground economy has the potential to turn the favorable (negative) impact of positive oil rent shocks on income inequality into an unfavorable one, and conversely, it can transform the unfavorable (positive) impact of negative oil rent shocks on income inequality into a favorable one. Additionally, real GDP per capita exhibits an inverse U-shaped relationship with income inequality, while unemployment positively influences income inequality. IntroductionA country’s progress toward social justice can be quantitatively assessed through indicators such as income distribution, poverty, and welfare. In recent years, rising concerns over income inequality have expanded the discourse on how natural resource rents—particularly oil revenues—shape economic growth and development. While resource abundance is often perceived as a blessing, its effects on economic development have been uneven and, at times, contradictory.Since the 1973 oil shock, Iran’s economic performance has been closely tied to its natural resource wealth. Moreover, a historical review of oil price trends reveals significant volatility, making it an unreliable source for financing national expenditures. According to theoretical foundations, natural resource rents should enhance the economic and social welfare of local communities. Ross (2007) notes that surprisingly little information exists about the relationship between natural resources and income inequality. However, it appears that resource-rich countries are, on average, neither more nor less unequal. Countries with abundant natural resources are often considered fortunate because these resources are valuable capital that can be transformed into essential infrastructure, fostering economic development and progress. Among natural resources, mineral resources—particularly hydrocarbons such as oil and gas—hold exceptional importance.The underground economy further complicates this relationship. As a parallel economic sector often linked to oil dependence, it diverts financial flows from formal oversight, undermining equitable wealth distribution. This not only deepens inequality but also erodes institutional quality and discourages human capital investment. In effect, overreliance on oil rents traps economies in cycles of distorted specialization and sluggish growth, perpetuating disparities.Despite these dynamics, few studies have examined the asymmetric effects of oil rents on income inequality or the mediating role of the underground economy—a critical gap this study addresses. Focusing on Iran (1978–2022), we investigate two central questions: First, does oil rent have an asymmetric effect on income inequality? Second, does the size of the underground economy influence how oil rent affects income inequality, and if so, how?Methods and MaterialFirst, the relative size of the underground economy is calculated using the MIMIC method. The structural equation model illustrates the relationship between the unobservable latent variable and observed indicators and causes. This model is widely used in various social sciences and economics. The MIMIC model consists of two main components: a structural equation and a measurement equation. As mentioned in the introduction, the primary objective of this study is to analyze and examine the asymmetric effect of oil rents on income inequality, with a focus on the role of the relative size of the underground economy in Iran. Therefore, the research model is designed to investigate and explain how increases and decreases in oil rents impact income inequality, emphasizing the relative size of the underground economy. To elaborate further, the reason for employing an asymmetric model lies in the limitations of symmetric or linear models, where the absolute magnitude of the independent variable's effect during an upward trend is assumed to be identical to its effect during a downward trend. In other words, in a symmetric estimation of oil rents impact on income inequality, it is conventionally interpreted that if an increase in oil rents leads to a rise (or fall) in income inequality by units, then simultaneously, a decrease in oil rents would result in a reduction (or increase) in income inequality by units. However, what occurs in reality may differ, as the effect of increasing oil rents on income inequality might not be identical to that of decreasing oil rents. In other words, in Iran’s economy, it is expected that income inequality will respond differently to increases in oil rents compared to decreases. Considering the explanations provided, as well as the potential delay in the impact of explanatory variables on income inequality and the influence of other variables affecting income inequality, a nonlinear autoregressive distributed lag (NARDL) approach is utilized. The asymmetric model specification is based on the study by Shin et al. (2014), which addresses the asymmetry in the coefficient of an influencing factor on the dependent variable under conditions of boom and recession. Drawing insights from the work of Pesaran et al. (2001), they define a model referred to as the nonlinear autoregressive distributed lag (NARDL) model.Results and DiscussionThe findings of the study, based on the estimation of the research model in the long run, indicate that: Firstly, positive shocks (increases) in oil rent have a favorable (negative) effect, while negative shocks (decreases) in oil rent have an unfavorable (positive) effect on income inequality. The difference in the magnitude of the impacts of positive and negative shocks highlights the asymmetric effect of oil rent on income inequality. Secondly, the favorable impact of increases in oil rent on income inequality diminishes as the size of the underground economy grows.Thirdly, the unfavorable impact of decreases in oil rent also weakens when the size of the underground economy increases. In a general summary and more detailed explanation, it can be stated that the underground economy acts as a double-edged sword in the relationship between oil rent and income inequality. Specifically, an increase in the size of the underground economy from 12.43% during increases in oil rent and 14.93% during decreases in oil rent makes the favorable (negative) impact of positive shocks in oil rent on income inequality unfavorable and turns the unfavorable (positive) impact of negative shocks in oil rent on income inequality into a favorable one. The inverse relationship between increases in oil rent and income inequality in Iran can be explained through channels such as increased government consumption expenditures, transfer payments and subsidies to lower-income deciles, and improved human development for the poor via government social spending. Furthermore, the results from the research model indicate that when disregarding the size of the underground economy, the favorable impact of increases in oil rent is less significant than the unfavorable impact of decreases in oil rent on income inequality, which confirms the presence of asymmetry in effects. Other findings show that real GDP per capita has an inverted U-shaped effect on income inequality, while unemployment has a positive effect on it.ConclusionGiven the findings of this study, it must be acknowledged that oil rents are an unreliable resource. Therefore, adopting policies to reduce the country’s budgetary dependence on rents derived from natural resources, including oil, is essential. Additionally, it should be emphasized that to maximize the favorable impact of oil rents on income inequality during positive shocks, policymakers must account for the relative size of the underground economy and implement measures to reduce its scale (e.g., streamlining government regulations and bureaucratic hurdles for formal business entry, reducing trade restrictions, fostering formal-sector employment through prudent management of oil revenues, etc.). Furthermore, since the adverse effect of oil rent declines—which lies beyond the managerial capacity of oil-producing countries (assuming the underground economy’s size is disregarded)—exceeds the favorable effect of oil rent increases, establishing a foreign exchange reserve or national development fund is imperative.
Shahryar Zaroki; Mehdi Hasanpour Varkolaei; Ebadollah Aghaei Anarmarzi; Fatemeh Azhari
Abstract
Economic welfare, as a key indicator of development, plays a vital role in improving living standards and the economic sustainability of countries. One of the factors influencing economic welfare is the size and growth of the population. Therefore, understanding the impact of population growth ...
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Economic welfare, as a key indicator of development, plays a vital role in improving living standards and the economic sustainability of countries. One of the factors influencing economic welfare is the size and growth of the population. Therefore, understanding the impact of population growth on economic welfare is crucial for informing policy decisions. To this end, the present study aims to investigate the effect of population growth on economic welfare in Iran during the period of 1971 to 2023, using two autoregressive distributed lag (ARDL) models, symmetric and asymmetric (NARDL). The results of the first (symmetric) model show that population growth has a negative effect on economic welfare in both the short and long term. The results also indicate that per capita income, economic growth, and government size have a positive and significant effect on economic welfare. The inflation rate also has a negative and significant effect on welfare, while the unemployment rate has no significant effect. The results of the second (asymmetric) model also show that an increase in population growth (positive shocks) negatively impacts economic welfare, while a decrease in population growth (negative shocks) has no significant effect. The other results also indicate that per capita income, economic growth, and government size have a positive and significant effect on economic welfare. The inflation rate also has a negative and significant effect on welfare, but the unemployment rate does not have a significant effect on economic welfare. According to the findings of this study, adopting policies based on controlling and regulating the level of population growth, along with effective policies in managing inflation and strengthening production, can play an important role in increasing economic welfare and achieving sustainable development in the country.IntroductionEconomic welfare is an important indicator of development and quality of life, and achieving a desirable level of it is the goal of development policies. Researchers examine factors such as economic policies, institutional structures, technology, inflation, economic fluctuations, and population growth. Population growth can have a positive or negative impact on this indicator. In recent decades, the relationship between population growth and economic welfare has gained importance, particularly in developing countries like Iran. Population growth may increase the need for public services, education, and health, but it puts pressure on resources and infrastructure, which affects welfare. A gradual decrease in population facilitates sustainable development, but its decline leads to population aging and economic, social, health, and cultural problems. At the macro level, population decline increases welfare and retirement costs, reduces the labor force, and decreases productivity. Also, a decline in population growth leads to a decrease in savings and slows economic growth. As a result, population balance and understanding its long-term relationship with welfare is important for policymaking. In recent decades, Iran has faced sanctions, exchange rate fluctuations and inflation, reduced trade, increased inflationary expectations, a shortage of supply expenditures, and a decline in purchasing power, which has made the economy challenging. Changes in government revenue cause exchange rate and GDP fluctuations and financial shocks, affecting prices and inflation. Studies in developing countries show differences in the relationship between population growth and welfare; some show a negative relationship and some show complex relationships. Piketty suggests that if population growth and per capita production were independent, higher population growth would contribute to economic growth. However, if it affects per capita growth, a high rate of population growth can affect growth and inflation, and new methods of analysis have made these relationships possible. This article uses a composite index of economic welfare in Iran for the first time, which provides a more comprehensive analysis. The effect of the population growth rate on Iran's welfare in the period 1350-1402 (1971-2023) has been investigated using autoregressive methods, both long-term and short-term. The findings emphasize the importance of population and economic policies for sustainable development and can guide policymakers in developing long-term strategies to facilitate development and improve the quality of life.Research Question(s)Does population growth affect economic welfare in Iran?Does population growth have a positive effect on economic welfare, or a negative effect?Does population growth have an asymmetric effect on economic welfare?Methods and MaterialIn this research, the Composite Index of Wellbeing (IEWB) is used to assess economic welfare, which considers the dimensions of effective consumption, wealth stock accumulation, income inequality, and economic insecurity, with the weight of each dimension varying based on observations. Its general form is as follows: IEWB=CF+WS+ID+ES. The welfare index has been calculated for the period 1350-1402 (Iranian calendar) using the aforementioned method. The aim of the study is to investigate the impact of population growth on welfare, using ARDL and NARDL models, which allow for the analysis of short-term and long-term relationships and the asymmetric effects of shocks. NARDL allows for the separation of positive and negative effects of variables; therefore, the impact of increasing and decreasing population growth rates on welfare is examined separately. The following specifies the unrestricted Autoregressive Distributed Lag (ARDL) model: In the second model, based on the autoregressive distributed lag (ARDL) method with asymmetric lags (NARDL), it is specified in the following equation: Results and DiscussionBefore estimating the model, the stationarity of the variables was examined using the Augmented Dickey-Fuller and Phillips-Perron tests. The results indicate that only economic growth is stationary at the level; the other variables become stationary after first differencing. Accordingly, linear and nonlinear autoregressive models can be used. Diagnostic tests show that the hypotheses of no autocorrelation, normality, homoscedasticity, and homogeneity of variance are not rejected. The bounds test also confirms the existence of a long-run relationship between the variables with 90% confidence; therefore, the null hypothesis of no long-run relationship is rejected. In the autoregressive distributed lag model, the optimal lag was selected based on the Schwarz-Bayesian information criterion (minimum of 3). The estimation results indicate that population growth has a negative effect, and per capita income has a positive effect on welfare. Inflation has a negative effect, and economic growth has a positive effect, as does the size of government. The unemployment rate has no significant effect, and the sanctions variable has a negative effect, such that welfare has decreased during this period. The error correction coefficient is significant and indicates that approximately 64% of the welfare deviation is corrected in each period. The long-run results indicate that population growth with a negative coefficient has an inverse relationship with welfare, and per capita income with a positive coefficient improves welfare. Inflation with a negative coefficient has a negative effect on welfare, and economic growth with 0.27 has a positive effect, increasing the level of welfare. The size of government has a positive effect in the long run, and the unemployment rate has no significant impact.Also, in the second model, the optimal lag was selected as 3 based on the Schwarz-Bayesian criterion in the minimum state. The results show that an increase in population growth has a negative impact on welfare; a decrease in growth has no significant effect, which indicates asymmetric behavior in its impact. Per capita income has a positive effect, inflation has a negative effect, and economic growth has a positive effect. The effect of government size is positive in the short term, but the unemployment rate has no significant effect. The post-JCPOA (Joint Comprehensive Plan of Action) impact is negative, and welfare has decreased by about 14 units in the period 1396-1402 (Iranian calendar). The error correction coefficient is significant and shows that 60% of the welfare deviation is adjusted each year. In the long run, increasing population growth reduces welfare. Population decline has no significant effect. Per capita income has a positive effect on welfare. Inflation has a negative long-term effect, economic growth has a positive effect, and government size also has a positive effect, but the unemployment rate has no significant effect.ConclusionPopulation growth is a significant factor in economic and social dynamics, influencing age structure, migration, inequality, the labor market, and production capacity. Malthus (1798) believed that rapid population growth would lead to reduced welfare and poverty in the long run because increased income for the poor would lead to population growth and decreased productivity. Recent research, such as Peterson (2017), has shown that population growth in low-income countries, especially with high fertility rates, has negative consequences, while decreased mortality has more positive effects. The results of this study, using linear and non-linear autoregressive models, indicate that the average economic welfare in Iran during 1350-1402 (1971-2023) is about 44.26 percent. Welfare had an upward trend in the 1350s (1970s) but fluctuated later, reaching 62.62 percent during the Fifth Development Plan and decreasing from 1399 to 1402 (2020-2023), coinciding with the post-JCPOA sanctions. The NARDL model shows that population growth negatively impacts welfare, but a decrease in population growth has a positive, though insignificant, effect. Without sufficient infrastructure, uncontrolled population growth puts pressure on resources and reduces welfare. Long-term inflation has a strong negative effect on welfare, while economic growth and per capita income improve the situation, according to the growth and Friedman's permanent income theories. Government size also has a positive effect, indicating the government's role in services and welfare. The unemployment rate does not have a significant effect, perhaps due to structural or support reasons. The results suggest that population policymaking in Iran should be done carefully and based on economic and social capabilities. Population growth can contribute to economic growth in some circumstances, but without the necessary infrastructure, it can negatively affect welfare. Policies should aim for an optimal growth rate. The experience of economically successful countries shows that combining population policies with economic policies such as subsidies and tax exemptions provides a balance between growth and welfare. Future research should focus on determining the optimal point of population growth and examining its complex relationship with welfare in the country's institutional structure. Also, studying the difference in the optimal rate in different regions can design effective regional policies and be an important tool for policymakers in areas such as family, education, and employment.
Esfandiar Jahangard; Alireza Jahangard; Negar Ebrahimi
Abstract
In recent years, with the increased availability of data and statistics, particularly multi-country input-output tables and firm-level microdata, along with advances in the data processing capacity of personal computers for managing these vast datasets, as well as information and communication ...
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In recent years, with the increased availability of data and statistics, particularly multi-country input-output tables and firm-level microdata, along with advances in the data processing capacity of personal computers for managing these vast datasets, as well as information and communication infrastructure, the efficient shared use of databases for foreign trade analysis has become possible. The goal of this paper is to implement the gross export decomposition method by Borin and Mancini (2023), using a source-based approach and the perspective of the exporting country, as a foundational analysis for decomposing value-added in the gross exports of Iran’s economic activities.
The contribution of this paper to the economic literature on Iran can be summarized in the following three aspects: First, it utilizes data from the 2016 inter-country input-output database, including data on Iran, for empirical documentation. Second, it focuses on the most recent theoretical framework presented by Borin and Mancini (2023), with a source-based approach and country perspective, to decompose the value-added in the exports of Iran’s economic activities. Third, it offers a structural interpretation of the value-added decomposition of Iran's exports for the year 2016, which can be useful for researchers and policymakers in understanding the global value chains of Iran’s economic activities. The results show that Iran plays a small and fragile role in the global economy.
Introduction
The global economy has become increasingly interconnected, necessitating comprehensive tools to understand complex trade relationships. Traditional trade statistics, which rely on gross export values, often obscure the actual value added by countries. The emergence of inter-country input-output tables allows for a detailed examination of value-added flows within international trade networks. These tables track the production processes across different countries, shedding light on how value is added at each stage of production. This paper builds on the gross export decomposition framework developed by Borin and Mancini (2023), which enables a nuanced analysis of value-added in exports. By applying this framework to Iran's economic activities, we can gain a clearer picture of how different sectors contribute to the country's export economy. This approach provides a more accurate reflection of Iran's role in global value chains (GVCs), moving beyond traditional metrics that may understate or overstate its economic contributions.
The study utilizes the Inter-Country Input-Output(ICIO) database for the year 2016 which includes Iran, which provides comprehensive data on trade and production relationships among various countries. The ICIO database is particularly suited for this analysis as it captures the interconnected nature of global trade and production networks. The Borin and Mancini (2023) methodology involves decomposing gross exports into three main components: The domestic value-added (DVA), that is value-added exported in final or intermediate goods. This is part of the Domestic Content – the part of exports that originated in the country – and is also a measure of GDP in gross exports or in intermediates absorbed by direct importers. The foreign value-added (FVA) that is value-added contained in intermediate inputs imported from abroad, exported in the form of final or intermediate goods. This is part of the Foreign Content – the part of gross exports that originated abroad. The returned value-added is domestic VA in intermediates exported. By applying this decomposition method, we can analyze the contribution of various sectors to Iran's export economy. This analysis involves several steps:
Data Preparation: Extracting relevant data from the ICIO database for Iran and its trading partners.
Decomposition Calculation: Applying the Borin and Mancini (2023) method to decompose Iran's gross exports into DVA, FVA, and RDVA.
Sectoral Analysis: Examining the results to identify key sectors contributing to Iran's value-added exports.
Results and Discussion
The results reveal significant insights into the structure of Iran's export economy. In 2016, Iran's gross exports were composed predominantly of Domestic Value Added (DVA), reflecting the substantial contribution of domestic industries to the country's exports. The analysis shows that the oil and gas sector plays a crucial role in generating DVA, given Iran's abundant natural resources.
However, the study also highlights the presence of Foreign Value Added (FVA) in Iran's exports. This indicates that foreign inputs are integrated into Iran's production processes, demonstrating the interconnectedness of Iran's economy with global supply chains. For instance, machinery and equipment imported from other countries are essential for Iran's manufacturing sector, contributing to the FVA in its exports. The Returned Domestic Value-Added component, although smaller, provides interesting insights into the circular nature of some value-added flows. This component illustrates how certain domestic value-added returns to Iran after being processed abroad. For example, raw materials exported from Iran may be processed into intermediate goods in other countries and then re-imported for further manufacturing. The application of the Borin and Mancini (2023) value-added decomposition method provides a detailed and nuanced understanding of Iran's export economy. By distinguishing between Domestic Value Added (DVA), Foreign Value Added (FVA), and Returned Domestic Value Added (REF), this analysis offers a comprehensive view of how different sectors contribute to Iran's gross exports.
Conclusion
The study reveals that while Iran's export economy is heavily reliant on domestic industries, it is also deeply from oil and mining interconnected with global supply chains. Furthermore, the Returned Domestic Value-Added component highlights the circular nature of some value-added flows, illustrating the complexity of global trade relationships. For policymakers and researchers, these insights are invaluable. Understanding the composition of Iran's export economy can inform strategies to enhance domestic industries' competitiveness and better integrate into global value chains. Additionally, recognizing the role of foreign inputs in domestic production can guide policies aimed at improving the efficiency and resilience of supply chains. In summary, the value-added decomposition method employed in this study offers a robust framework for analyzing Iran's export economy. It provides a clearer picture of how domestic and foreign industries interact within global trade networks, offering valuable insights for enhancing Iran's economic performance in the context of global value chains.
Habib Morovat
Abstract
A substantial body of research highlights the presence of social preferences, their economic and political implications, and the varied conditions that influence their effects on the equilibrium and outcomes of human interactions. This study utilizes data from the Global Preferences Survey (GPS) to explore ...
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A substantial body of research highlights the presence of social preferences, their economic and political implications, and the varied conditions that influence their effects on the equilibrium and outcomes of human interactions. This study utilizes data from the Global Preferences Survey (GPS) to explore how age and gender impact social preferences across Iran at both national and provincial levels. The findings from a multivariate regression analysis reveal that age positively and significantly influences trust and altruism, while it negatively and significantly impacts negative reciprocity, with no significant effect on positive reciprocity. Gender, on the other hand, shows a significant negative effect on trust, indicating that women tend to exhibit lower levels of trust. Additionally, income and education negatively and significantly impact trust but positively affect altruism and positive reciprocity, with no notable effect on negative reciprocity.
The study also presents a provincial ranking within Iran based on key elements of social preferences: trust, altruism, positive reciprocity, and negative reciprocity. According to the research findings, Iran scores above the global average in terms of altruism, trust, and reciprocity. Notably, Markazi, Lorestan, and Ilam provinces rank highest in trust, altruism, and reciprocity, respectively.
Introduction
An influential set of laboratory experiments has questioned the conventional wisdom among economists and the validity of Stigler's (1981) position that "when self-interest and moral values conflict, most of the time, self-interest theory will win." These studies are complemented by a whole body of theoretical research that examines the nature and economic consequences of "social preferences". The most important of these theories consider social preferences as a result of altruism, reciprocity, fairness, and inequality-avoidance, maintaining social image or other motives. Studies based on field experiments also confirm the results of laboratory studies (List, 2006 and Falk et al., 2018). Ignoring social preferences makes economists unable to understand basic economic questions. Without considering social preferences, it is impossible to understand questions such as the effects of competition on market outcomes, the rules governing cooperation and collective action, the effects and determinants of material incentives, contracts and optimal property rights arrangements, and the important forces shaping social norms and market failure (Fehr and Fischbacher, 2002).
Determining factors of social preferences can be different according to demographic, geographic and cultural characteristics. Studies have shown that older people tend to prioritize fairness and reciprocation behavior (Falk et al., 2018). Also, studies have shown that women are typically more cooperative and tend to be more than men (Crawson & Gnezzi, 2009 and Falk & Hermel, 2018). Research has shown that older people and women typically have more trust (Crowson Vegnizi, 2009 and Duhman et al., 2008).
In Iran, due to the diversity of culture and geographical conditions, it is important to investigate the role of demographic variables on social preferences. In this research, we examined the causal relationship between age, gender, income, and education with each of the components of social preferences at the national and provincial levels with a standard model and technique.
Methods and Material
In order to investigate the factors affecting social preferences, the required data and information have been collected using a questionnaire. The information related to the dependent and independent variables of this research was extracted from the valid questionnaire available in Falk et al.'s article (2018) and the GPS website. Information related to Iran has been extracted from more than 2500 participants from all provinces of the country. In order to investigate the causal relationship between age and gender with variables of social preferences, multivariate regressions have been used in general as follows:
Results and Discussion
Using Ordinary Least Squares (OLS) regression, we estimated a model to examine the significance of gender, age, and cognitive ability on various dimensions of social preferences, including trust in others, altruism, and positive and negative reciprocity, as well as an aggregated index of social preferences. The analysis was conducted both at the national level and across individual provinces. Table 1 presents the estimated coefficients and their significance, highlighting how each variable influences these social preference metrics across different contexts within the country.
Table 1: Model estimation results for the whole country
independent variables
trust
altruism
Positive reciprocity
Negative reciprocity
Social preferences index
Dependent variables
age
0.0787***
0.006***
0.0053
-0.016**
0.0058*
Squared age
-0.0001
0.00005
-0.00004
-0.0003
-0.0002
gender
-0.1293***
0.049
0.0018
-0.0615
-0.1242
income
-0.045**
0.029***
0.03***
0.018
0.015**
education
-0.010***
0.022***
0.033***
0.012
0.014**
math
0.0165**
0.0095
0.0224***
0.0305***
0.0818***
R-Squared
0.0451***
0.007***
0.0068***
0.0582***
0.0126***
Sample size
2406
2474
2478
2449
2373
Source: Research calculations
*, **, *** are significant statistics at the level of 10, 5, and 1 percent, respectively.
The models were tested for heteroskedasticity, and where it was detected in the residuals, a robust estimator was applied. Specifically, in the models for positive reciprocity and the social preferences index, the null hypothesis of homoskedasticity was rejected, necessitating the use of robust estimations. Ramsey's test was conducted to check for potential endogeneity arising from omitted variables or specification errors, and this test did not reject the null hypothesis in any of the models. Table 2 provides the goodness-of-fit test results for these models.
Table 2: The results of goodness of fit tests
Tests/ Models
Trust
Altruism
Positive reciprocity
Negative reciprocity
Social preference index
Breusch–Pagan
(Prob)
1.88
(0.17)
1.75
(0.18)
11.65
(0.0006)
2.52
(0.11)
3.87
(0.0491)
Ramsey Test
(Prob)
1.03
(0.38)
0.26
(0.85)
0.15
(0.92)
1.81
(0.14)
1.25
0.29
Source: Research calculations
Conclusion
In this research, an attempt was made to investigate the effect of demographic variables such as age, gender, income, and education on social preferences for the entire country and province. The results of multivariate regression showed that, firstly, people's age has a positive and significant effect on trust in others and altruism. This finding is consistent with the findings of most studies. However, age has a negative and significant effect on negative reciprocity, which shows that negative reciprocity decreases with increasing age. And finally, age does not have a significant effect on positive reciprocity. Secondly, gender only has a negative and significant effect on trust in others and has no significant effect on other social variables. In other words, women are less devoted to others than men. The findings of this study are not consistent with the findings of most other studies on gender. Because in most other studies, women are more social, more altruistic and have significant negative countermeasures compared to men. The cause of this issue can be related to the culture and religion and the role of women in the country, which needs to be studied more in this field. Thirdly, income and education have a negative and significant effect on trust and have a significant and positive effect on altruism and positive reciprocity and do not have a significant effect on negative reciprocity. The effect of income and education is very similar. Income and education have a negative and significant effect on trust and have a significant and positive effect on altruism and positive reciprocity and do not have a significant effect on negative reciprocity.
Failure to understand and identify factors influencing social preferences leads to a misunderstanding of people's economic behavior (Fehr and Fischbacher, 2002). Correct understanding and identification of factors affecting social preferences helps policymakers to act optimally in understanding the process of cooperation between economic factors, designing economic incentives, and designing social policies.
Shahryar Zaroki; Ahmadreza Ahmadi; Mehdi Hasanpour Varkolaei; Mohammad Reza Zare Chamazkoti
Abstract
This study investigates the impact of government subsidies on economic well-being in Iran, using both symmetric and asymmetric approaches. Economic well-being is first quantified using a composite index based on four components: consumption flow, wealth stocks, income distribution, and economic ...
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This study investigates the impact of government subsidies on economic well-being in Iran, using both symmetric and asymmetric approaches. Economic well-being is first quantified using a composite index based on four components: consumption flow, wealth stocks, income distribution, and economic security. The study then applies an ARDL & NARDL model to assess the linear and non-linear effects of subsidies on economic well-being over the period from 1973 to 2022.
The findings reveal a significant decline in economic well-being from 1975 until the end of the Iran-Iraq War, followed by an upward trend until the Sixth Development Plan. The average index value increased from 20.9 in the First Plan to 60.3 in the Fifth Plan, but then fell to an average of 8 in the Sixth Plan. The share of subsidies in total government expenditure increased from 1973 to the end of the war and during the First to Fourth Development Plans, but decreased thereafter, particularly in the Sixth Plan.Long-term estimates indicate that both increases and decreases in subsidy expenditures directly impact economic well-being. However, the effect of subsidy reductions on economic well-being is more significant than that of increases, suggesting the presence of an asymmetric impact. Moreover, the analysis of the optimal subsidy level reveals that subsidies enhance economic well-being up to a threshold of 8.8% of government expenditure; beyond this point, increasing subsidies has a detrimental effect on economic well-being.Additionally, the study highlights a marked decline in economic well-being during the periods 1976-1989 and 2017-2022, with the post-JCPOA period witnessing a more substantial decline due to the intensification of sanctions.
Introduction
The issue of well-being and its improvement is one of the central concerns of societies, with politicians often claiming to prioritize the creation of well-being for their citizens. Economic well-being is influenced by numerous factors, including population size, economic complexity, globalization, exchange rate fluctuations, economic growth, unemployment, inflation, sanctions, production volatility, government size, and government spending. Empirical studies by Sowa and Edpri (2007), Nan and Zhang (2018), Sunita and Mahendra (2022), and Wu and Liu (2023) highlight the significant impact of government expenditures, such as subsidies, on both economic and social well-being. These studies establish a notable relationship between government spending and economic well-being.
Among the key factors influencing economic well-being, government expenditures, and specifically subsidized spending, play a critical role. These expenditures can directly or indirectly affect economic well-being. Consequently, analyzing changes in government expenditures, particularly subsidies, is crucial for policies aimed at promoting economic growth and improving well-being. Given the close relationship between these two variables, determining the optimal level and composition of government spending can have substantial implications for macroeconomic policy.
It is important to note that the relationship between government expenditures, subsidies, and the factors influencing them is not necessarily symmetrical. Rather, it may exhibit asymmetry. This study seeks to first calculate economic well-being over the past fifty years using a composite index. Second, it aims to analyze both the symmetric and asymmetric effects of subsidy expenditures on well-being in Iran from 1973 to 2022 through three separate models. The autoregressive distributed lag (ARDL) model, incorporating both linear and nonlinear approaches, is employed for model estimation. Additionally, the study explores how variations in subsidy spending impact economic well-being, particularly by distinguishing between the effects of subsidy increases and decreases.
This research is innovative in several ways. First, it uses a comprehensive economic well-being index, as opposed to the Amartya Sen social welfare index, over a more extensive time period (1973-2022), which covers significant political and economic events, including Iran’s development plans, the Iran-Iraq War, the revolution, and international sanctions. Second, while previous studies have not specifically examined the asymmetry in subsidy effects on well-being, this research distinguishes between the impacts of subsidy increases and decreases. Third, the study aims to determine the optimal level of government subsidy expenditures for maximizing economic well-being.
Method
For this study, the IEWB (Index of Economic Well-Being) is used as a comprehensive measure to analyze the economic well-being of Iran over the period from 1973 to 2022. The IEWB index incorporates four key dimensions: effective per capita consumption flow, wealth stocks, distribution of individual income, and economic security. Each of these dimensions is weighted based on its relative importance.The general formula for the IEWB index is as follows:
IEWB=CF+WS+ID+E
Where:
CF = Effective per capita consumption flow
WS = Wealth stocks
ID = Distribution of individual income
E = Economic security
To calculate the economic well-being index, each of these components is assigned a coefficient based on their relative importance. Following the methodology of Osberg and Sharp (2009) and prior studies, the coefficients are as follows:
4 for consumption (CF),
for wealth stocks (WS),
25 for income distribution (ID),
25 for economic security (E).
Given that the dimensions are measured using different units, each component is first normalized before calculating the weighted average. The normalization process ensures comparability across the dimensions, and it is carried out using the following formula:
Here, represents the normalized value, while and denote the minimum and maximum values of the respective dimension. Using this approach, the economic well-being index was calculated for the period from 1973 to 2022.
As mentioned in the introduction, the main goal of this research is to analyze and investigate the symmetrical and asymmetrical effects of subsidies on economic well-being in Iran. The research model focuses on examining how subsidies affect economic well-being, specifically distinguishing between the effects of subsidy increases and decreases. The asymmetric model specification follows Shin et al. (2014), who examined how coefficients of factors affecting a dependent variable may differ during periods of economic well-being versus recession. Building on Pesaran et al.'s (2001) work, they developed the non-linear autoregressive with distributed lag (NARDL) model. This study applies their pattern in two formats (symmetrical and asymmetric) to analyze our research variables. Additionally, a third model is specified to calculate the optimal ratio of subsidy to total government expenditure.
Results and Discussion
The present research investigates and analyzes the effect of subsidies on Iran's economic well-being based on symmetrical and asymmetrical approaches. Additionally, in a separate model (the third model), the optimal ratio of subsidy to government expenditure was calculated. For this purpose, economic well-being was first calculated using the composite index of well-being based on four dimensions for the period 1973-2022, and the coefficients were estimated using three patterns with ARDL & NARDL approaches.
The results of calculating the well-being index and describing the data show that the well-being index increased consistently from the first plan to the fifth plan, rising from 20.9 in the first plan sub-period to 60.3 in the fifth plan sub-period. Furthermore, after the third plan sub-period, the level of well-being remained higher than the average of the studied periods.
The long-run estimation results indicate that subsidies have a direct and asymmetric effect on economic well-being. The direct effect of subsidy decreases on economic well-being is greater than the effect of subsidy increases. Additionally, subsidies demonstrate an inverted U-shaped effect on economic well-being. The optimal ratio of subsidy to total government expenditure for maximizing economic well-being is 8.8%. When subsidies are
below this 8.8% threshold, increases in subsidies are associated with improved economic well-being; above this threshold, additional subsidies lead to decreased economic well-being.
Real GDP per capita and economic growth show positive effects on economic well-being, while inflation demonstrates a negative effect. Based on these findings, it is recommended that policymakers focus on policies to increase subsidy expenditures. However, given the significant negative impact of inflation on economic well-being, policymakers should carefully consider inflation when increasing subsidized expenditures. Non-inflationary methods should be prioritized when financing subsidized expenditures wherever possible.
Akbar Bagheri; Hasan Abagheri
Abstract
One of the basic requirements for sustainable growth and development is the existence of an efficient financial sector to finance production activities. In this regard, the present study has estimated the probability of bankruptcy of banks employing the Altman index and using evidence from ...
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One of the basic requirements for sustainable growth and development is the existence of an efficient financial sector to finance production activities. In this regard, the present study has estimated the probability of bankruptcy of banks employing the Altman index and using evidence from the banking industry for 18 public and private banks in the period from 2016 to 2021. Using the panel data approach, the influencing factors in the probability of bankruptcy are also investigated. Estimates from the panel approach show that credit diversification is effective in reducing the probability of bankruptcy. Similar evidence shows that the probability of bankruptcy for private banks is equal to 68% and for public banks 70%. The calculation of the Herfindahl-Hirschman concentration index has also shown a value of 0.33 for Iran's private banks and 0.63 for state banks, so credits in private banks have a higher diversity than in state banks. According to the results of the research, more attention should be paid to diversifying credits in public and private banks, determining the optimal size of banks to take advantage of economies of scale, monitoring the central bank's compliance with Basel index standards and monitoring the maintenance of banks' cash balances for the unforeseen demand of the society.
Reza Maaboudi; Zeynab Dare Nazari
Abstract
This paper aims to study the relationship between financialization and the variables of income distribution and economic growth in Iran during 1988:q1 -2019:q4. To analyze the relationship, the continuous wavelet transform approach and to explain the results with empirical facts, the regression ...
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This paper aims to study the relationship between financialization and the variables of income distribution and economic growth in Iran during 1988:q1 -2019:q4. To analyze the relationship, the continuous wavelet transform approach and to explain the results with empirical facts, the regression approach with Mixed Data Sampling (MIDAS) have been used. Results of the wavelet transform show that, in the short-run, there is a positive coherency between financialization and income inequality; so that during 1989-2007 and 2014-2019, financialization is the leading and cause of income inequality. Also, in the short run, there is a negative coherency between financialization and economic growth; in a way that during 1989-2019 financialization is the leading and cause of economic growth. The results of the MIDAS approach also show that in addition to financialization, the variables of government expenditures, economic growth, inflation, and sanctions have a positive and significant effect, and the policy of targeted subsidies has a negative and significant impact on income inequality. Also, financialization, government expenditures, income inequality, inflation, and economic sanctions have a negative and significant effect, and physical capital, employment, and degree of trade openness have a positive and significant effect on economic growth. As a result, the phenomenon of financialization accompanied by the imposition of economic sanctions and government policies, on the one hand, leads to an increase in the wage and income gap between the real sector and the financial sector, and, on the other hand, their effects leave a negative impact on economic growth by the diversion investment to unproductive activities.
Mahdiyeh Saei
Abstract
The present study seeks to investigate the effect of climate change on exports and imports and the welfare of urban and rural consumers in Iran. For this purpose, the CGE is used as a tool for analysis and The Social Accounting Matrix (SAM) of 1390 as a database. In this study, activity and goods ...
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The present study seeks to investigate the effect of climate change on exports and imports and the welfare of urban and rural consumers in Iran. For this purpose, the CGE is used as a tool for analysis and The Social Accounting Matrix (SAM) of 1390 as a database. In this study, activity and goods accounts were split into cereal accounts, other agriculture, industry, and mining and services. The results of the model, using three simulation scenarios, showed that as a result of climate change, the production of all sectors excluding industry and mining would be reduced, which would result in higher prices for cereals and lower prices for other activities. In addition, grain exports will decrease in different scenarios and exports of other goods will increase. On the other hand, cereal imports will decrease as imports and other commodities decrease. In this regard, the welfare of urban and rural households will also decrease, which is more pronounced for urban households. According to the results, the macroeconomic effects of these scenarios are the reduction of nominal and real GDP, total absorption and private consumption of households.
Parviz Davoudi; Hassan Sabzi Khoshnami
Abstract
Income inequality has received much attention from economists and policymakers as one of the components of economic development. On the other hand, the difference between developed and developing economies can be checked in the efficiency of their financial systems. This study investigates the ...
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Income inequality has received much attention from economists and policymakers as one of the components of economic development. On the other hand, the difference between developed and developing economies can be checked in the efficiency of their financial systems. This study investigates the effect of financial development on income inequality in Iran using the threshold regression method during 2020-1967. The results show that the effect of financial development of the banking sector and the stock market on income inequality has a threshold limit. in model one, the financial development of the banking sector before and after the threshold has a significant and negative effect on inequality. In model two, stock market financial development has significant and negative effect on income inequality before the threshold but not significant effect after the threshold. However, there is insufficient evidence to support the effect of financial development on income inequality in the form of Greenwood and Jovanovic's inverse U hypothesis.
hojjat izadkhasti
Abstract
Regional inequality has economic, social and cultural dimensions. One of the main concerns of planners and policymakers in economic development programs is reduction of poverty and inequality based on provincial income per capita. Therefore, through budget allocation tools, the government can reduce ...
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Regional inequality has economic, social and cultural dimensions. One of the main concerns of planners and policymakers in economic development programs is reduction of poverty and inequality based on provincial income per capita. Therefore, through budget allocation tools, the government can reduce inequalities in provincial incomes per capita and create more balance among provinces. In this paper, the effects of inequality in the allocation of provincial budget on provincial inequalities are estimated using dynamic panel data method for period 2005-2016 in 30 Iranian provinces. The estimation results indicate that the increase in inequality of provincial capital formation budget has reduced inequality in provincial income. This result indicates an increase in government investment in infrastructure and a higher share of government development budget in less-developed provinces. Also, with increasing inequality in provincial current per capita budget, inequality in regional income has increased; because an increase in inequality of current per capita budget in the provinces can lead to unbalanced public service provision and an increase in inequality of income per capita.
Ali Hussein Samadi; Ebrahim Hadian; parviz rostamzadeh; hamzeh sheikhiani
Abstract
The main purpose of this paper is to investigate the effect of trade liberalization on income inequality with consideration of socio-institutional factors emphasized by resistance economy policies in Iran. To meet this end, the Decaluwe et al. (2013) model has been adjusted and it is solved based on ...
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The main purpose of this paper is to investigate the effect of trade liberalization on income inequality with consideration of socio-institutional factors emphasized by resistance economy policies in Iran. To meet this end, the Decaluwe et al. (2013) model has been adjusted and it is solved based on Social Accounting Matrix data of year 2011. The results show that in current institutional situation of Iran, the reduction of tariffs in the agriculture, horticulture, forestry and mining sectors can reduce inequality and tariff reduction in sectors of food industry, low technology industries, high technology industries, higher education, transportation and other services will increase inequality in urban and rural areas. By reducing tariff rates in mid-tech industries, inequality in urban and rural areas initially decreases and then increase. Reducing tariffs in oil and gas and healthcare sectors does not affect inequality in urban and rural areas. It is also shown that in the case of implementing resistance economy policies and improving institutional quality, tariff rate reduction in all sectors of production will reduce inequality. Reducing tariff rates in primary and secondary education sectors, housing and other sectors that de not have any link to outside world has no effect on inequality, both in the current institutional situation and in the case of institutional quality improvement as a result of implementing resistance economy policies. Therefore, it is suggested that attention be paid to improvement of institutional quality in the country, along with the implementation of resistance economy policies.
Reza Zamani
Abstract
The main purpose of this paper is to study social order in Iran between two revolutions (1906-1979). Generally, there are two types of social order: limited- and open-access. Limited-access (or Natural State) social order is sub-categorized into three types of fragile, basic and mature. It can be shown ...
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The main purpose of this paper is to study social order in Iran between two revolutions (1906-1979). Generally, there are two types of social order: limited- and open-access. Limited-access (or Natural State) social order is sub-categorized into three types of fragile, basic and mature. It can be shown that between constitutional revolution and 1921 coup, Iran was caught in fragile natural state. Then, from this coup to political regime change from Qajariyyeh to Pahlavi (1921-1925), Iran was switching from fragile to basic natural state. Iran’s social order in Reza Shah era (1925-1941), was basic natural state and economic growth achieved in a closed political sphere which did lead to double imbalances. From 1941-1946 Iran experienced a sharp backward move to fragile social order. After that, social order was switching from fragile to basic natural state during 1947-1953. During period 1953-1963, basic natural state was stabilized. There were a lot of attempts to politically control the military (as the last transition condition to open-access social order) during 1941-1963, but these efforts finally failed. The golden decade of economic growth in Iran happened between 1963 to 1972. In this decade, economic system was switching form basic to mature natural state. However, political access was under tight restriction and control. Therefore, double imbalance of economic and political systems emerged again. In 1973-1979 the country was going back from basic to fragile natural state, and dominant coalition threatened and finally was overthrown completely by Islamic revolution (1979).
alaeddin ezoji; Abbas Assari Arani; mohmmad reza vaeze mahdavi; GholamReza K. Haddad
Abstract
The relationship between human capital and labor productivity is always important for economists. Considering the relationship between these two will also be remarkable in microeconomic studies. Meanwhile, the impact of different dimensions of human capital on labor productivity can be a measure ...
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The relationship between human capital and labor productivity is always important for economists. Considering the relationship between these two will also be remarkable in microeconomic studies. Meanwhile, the impact of different dimensions of human capital on labor productivity can be a measure of actual effect of human capital on productivity. The aim of this paper is to examine the effects of various dimensions of human capital (education, health, and experience), on labor productivity based on individual characteristics in Iranian economy. We use micro data (Cost–Income Survey of Urban Areas - 2013) and estimation of Quantile Regression (QR) econometric technique. For this purpose, net income (wage and salary) for employment in private sector is used as proxy of labor productivity. Our results show that in different quantiles, all three dimensions of human capital have a positive and significant effect on productivity of labor force employed in Iranian private sector. Meanwhile, in different quantiles, health indicators of human capital are more volatile than other dimensions of human capital, i.e. education and experience. So, in lower quantiles (Ql), the response of labor productivity to health indicators is more than higher quantiles (Qh). Because of that, any kind of health shock may have a greater effect on labor productivity in lower-income groups. This result shows the importance of health capital in social security, insurance and health systems and reminds us to improve the productivity of working people by means of better health capital.
Siab Mamipour; Elham Mogaddasi
Abstract
This paper aims to study the role of gold, stock and foreign currency as hedges against inflation in Iran based on monthly data over period 2000-2016 by using a novel approach with nonlinear autoregressive distributed lags (NARDL). To achieve this goal, the effect of positive and negative inflation shocks ...
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This paper aims to study the role of gold, stock and foreign currency as hedges against inflation in Iran based on monthly data over period 2000-2016 by using a novel approach with nonlinear autoregressive distributed lags (NARDL). To achieve this goal, the effect of positive and negative inflation shocks on price of these assets is estimated separately. The results show that all assets (foreign currency, gold and stock) are hedges against inflation in Iranian economy. As inflation rate increases, the prices of these assets also increase, but the magnitude and type of their hedge against inflation vary in different time horizons. The results show that the effects of both positive and negative inflation shocks on gold price are symmetric in the short-run, but in the long run, the effect of positive inflation shocks on gold price are more than negative shocks. The results of the inflationary coverage of foreign currency show that the effects of the positive and negative inflation shocks on it are asymmetric in the short-run and long-run; while these effects are symmetric for stocks in both short- and long-term. Furthermore, stocks is a proper hedge against inflation in the long run and not only it maintains purchasing power, but also it increases value of investors’ assets. Moreover, the inflationary coverage of foreign currency and gold are the same and less than rising inflation, but exchange rate is a hedge in the short-run and gold plays the role of hedge against inflation in the long-run.
Esfandiar Jahangard; parisa mohajeri; leila momeni
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 ...
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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.
Saeed Moshiri; Maryam Parsa; Liela Darougar
Abstract
As a general-purpose technology, information and communication technology (ICT) leads to increasing productivity and economic growth in different sectors. Iran, as a semi-industrialized developing economy, has recently made relatively high level of investment on ICT in different sectors of the economy. ...
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As a general-purpose technology, information and communication technology (ICT) leads to increasing productivity and economic growth in different sectors. Iran, as a semi-industrialized developing economy, has recently made relatively high level of investment on ICT in different sectors of the economy. In this paper, we investigate the relationship between ICT sector and other sectors of the economy using an input-output table. We construct an input-output table with 37 sectors including ICT sector, using the updated IO table for year 2010. ICT goods production comprises 1.8 percent of total goods production and ICT service is 1.32 percent of the total service production. The results show that one unit increase in final demand for information technology (IT) products will increase total output by 1.63 units and one unit increase in final demand for communication technology (CT) products will increase total output by 2.18 units. The greatest impact of ICT in manufacturing sectors will be respectively in food and beverage, basic metal, and chemical products, and in the services sector in the wholesale, retail sale, financial intermediates, and real estate services. We also calculate the Average Propagation Length (APL) of the changes in the ICT final demand. The results indicate that the average propagation length of the changes in the ICT final demand is 1 for the services sector and 2 for the manufacturing industries.
Abolfazl Pasbani; ali cheshomi; meisam pileforoush
Abstract
This article has surveyed effect of political institutions on performance of oil funds and seeks to make a meaningful contribution to the literature on the use of oil funds in resource-dependent countries, by proposing that what differences in political institutions, cause differences in performance ...
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This article has surveyed effect of political institutions on performance of oil funds and seeks to make a meaningful contribution to the literature on the use of oil funds in resource-dependent countries, by proposing that what differences in political institutions, cause differences in performance of oil funds in Iran, Norway and Saudi Arabia. In situations that institutional framework causes maximization of benefits with long-term decisions, the mechanism of oil funds are successful. And in situations that institutional framework causes maximization of benefits with short-term decisions, the mechanism of oil funds are not successful. Institutional framework in full democracies and paternalism authoritarian regimes lead to the long-term decisions, but institutional framework in flawed democracies leads to short-term decisions. It seems that in Iran, motivations implicit in institutional structure push politicians to take short-term decisions instead of long-term decisions, such that politicians are inclined to maximize their own interests and consider short-term period. That has been of the most important factor in failure of Iran's Foreign Currency Reserves Account or National Development Fund.
Mohammad Reza Farzaneh; Ali Bagheri; Mohammadhossein Ramezani Ghavamabadi
Abstract
Unsustainable withdrawal of groundwater resources has resulted in increasing spread of economic, social and ecological consequences in Iran. Particularly, since the adoption of "Protection of groundwater resources of Iran Act" (passed in 1966), numerous policies and laws with the aim of protecting groundwater ...
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Unsustainable withdrawal of groundwater resources has resulted in increasing spread of economic, social and ecological consequences in Iran. Particularly, since the adoption of "Protection of groundwater resources of Iran Act" (passed in 1966), numerous policies and laws with the aim of protecting groundwater resources have been passed and enforced; however, the level of groundwater table has been continuously decreasing while the number of prohibited plains have been increasing. So, the question arises that where the problem is originated from; and despite nearly 50 years of policy-making, legislation and implementation, why are groundwater resources not protected, but the situation has been getting worse and worse. Relying on the premises of institutional theories, the present paper will address the context and features of water bodies based on three components of mental models, structures, and the system of benefit and power distribution. The results show that the components of institutional environment are inconsistent with the context of legality.
Mansour Zarra Nezhad; Elaheh Ansari; Masood Khoda Panah
Abstract
Information constitutes the main basis for decision making. Sometimes the amount of information obtained is so huge that the inappropriate use of unanalyzed information will lead to making wrong decisions. Defining practical indices and the quantification of quality indicators in different domains can ...
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Information constitutes the main basis for decision making. Sometimes the amount of information obtained is so huge that the inappropriate use of unanalyzed information will lead to making wrong decisions. Defining practical indices and the quantification of quality indicators in different domains can be of remarkable help to discover fundamental problems, set goals, and choose the best way to achieve them. Islamic economy could be one of these areas. In this study, through following scientific principles, the composite index of Islamic economy in Iran from 1995 to 2012 was defined and estimated. In fact, it is for the first time that a long-term performance of a country is examined. The results show that the absolute value of the index has not changed significantly in the course of 18 years under study, and there have been fluctuations in a short run. Reducing unemployment and inflation rates, promoting the culture of the using non-interest-bearing deposits (Gharz-ol-Hasane), as well as reducing bank interest rate comprise strategies for improving this indicator in Iran.
Esmaeil Mirza’i; Teymour Mohammadi; Abbas Shakeri
Abstract
In this paper we assess the interaction between different macroeconomic variables and the quality of loan portfolio of banks in Iran by using a panel vector autoregressive (PVAR) method that controls for bank-level characteristics. For this purpose, we use a quarterly panel data of banks and some ...
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In this paper we assess the interaction between different macroeconomic variables and the quality of loan portfolio of banks in Iran by using a panel vector autoregressive (PVAR) method that controls for bank-level characteristics. For this purpose, we use a quarterly panel data of banks and some of the most important macroeconomic variables over the period 2002-2013. Variables of this research are the ratio of non-performing loans (NPLs) to total loans as the index for quality of loan portfolio of banks, GDP growth, real lending interest rate, monetary base and growth rate of banks’ loan. We find that a positive shock to real lending interest rate and loan growth rate improve the quality of loan portfolio of banks. However, printing more money by central bank (a positive shock to monetary base) leads to a drop in portfolio quality, while a positive shock to GDP growth rate doesn’t have a significant effect on NPLs. On the other hand, the feedback effect from NPLs on macroeconomic variables is verified, as a positive shock to NPLs (worsening the quality of loan portfolio) causes to exacerbate economic recession, to increase monetary base, and to decrease loan growth rate significantly, but it doesn’t have any significant effect on real lending interest rate .
Masoud Nonejad; Maryam Haghjoo
Volume 14, Issue 53 , July 2014, , Pages 63-82
Abstract
As economic integration in East Asia progresses, trade patterns within region are displaying an ever–greater complexity. Although inter–industry trade still accounts for the majority, its share in overall trade is declining. Instead, intra–industry trade (IIT), which can be further ...
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As economic integration in East Asia progresses, trade patterns within region are displaying an ever–greater complexity. Although inter–industry trade still accounts for the majority, its share in overall trade is declining. Instead, intra–industry trade (IIT), which can be further divided into horizontal IIT (HIIT) and vertical IIT (VIIT) is growing in importance. In this paper, we set out and examine different kinds of intra-industry trade between Iran and G-8 member states by comparing the Greenway, Hine and Milner (1994) and Fontagne and Freudenberg (1997) approaches to disentangling vertical and horizontal intra–industry trade. Then we introduce and examine a new index from Azhar and Elliott to define product quality types between Iran and G-8 members for the time of 2001-2009. Result shows that a significant share of Iran’s industry trade with G-8 state members has been assigned to vertical intra industry trade. With regarded to Azhar and Elliott index, the main share of intra-industry trade consists of low quality goods.
