Other innovative economic areas
Esfandiar Jahangard; Mohammad Ghasemi Sheshdeh; Teymour Mohammadi; Farbod Jozani Kohan
Abstract
In this article, data related to different generations was analyzed by using the overlapping generations model of three periods, And by modeling the productivity of manpower, its effect on Iran's economic growth has been analyzed by different generations. The method of conducting this research is analytical-quantitative. ...
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In this article, data related to different generations was analyzed by using the overlapping generations model of three periods, And by modeling the productivity of manpower, its effect on Iran's economic growth has been analyzed by different generations. The method of conducting this research is analytical-quantitative. The time period of the research is seasonal data from 1370 to 1400. To estimate the model, the stochastic dynamic general equilibrium method has been used. In order to design the research model and parameters, by using the data of national accounts and household budgets and creating a connection between these accounts, the productivity of human resources in different generations was extracted. The findings of the article indicate the fact that transfers related to the household in the consumption, education and health sectors have been more efficient in creating the productivity of human resources in different generations and has provided the reasons for the growth of productivity and economic growth. Based on the results, the age range of 25–64 years has the highest productivity on economic growth, which is consistent with the approach of the life cycle theory based on Ando and Modigliani's perspective and the life cycle theory based on intergenerational transfer accounts.
Majid Aghaei; Saeed Rasekhi; Sara Rangber
Abstract
Despite relative development in financial institutions, and the abundance of financial resources (income from oil sales), Iran has still struggled to experience high and sustainable economic growth rates, even experiencing negative growth rates in recent years. Therefore, investigating the ...
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Despite relative development in financial institutions, and the abundance of financial resources (income from oil sales), Iran has still struggled to experience high and sustainable economic growth rates, even experiencing negative growth rates in recent years. Therefore, investigating the influential factors in the relationship between financial development and economic growth is crucial. Accordingly, this study examines the role and significance of oil resources (oil course) on the relationship between financial development and economic growth through investment channels using the ARDL bounding test during the period from 1980 to 2020. The findings indicate that while financial development positively and significantly impacts investment, the oil curse weakens this relationship, suggesting an indirect negative impact of the oil curse on the financial development-economic growth nexus via investment channels in Iran. The interactive variable of financial development and the oil curse also had a negative and significant impact on investment during the examined period, indicating the financial system's inability to allocate resources effectively towards productive investments. Based on these results, it can be stated that the oil curse has affected the functioning of the financial sector in the Iranian economy and, by making this sector inefficient, has had a negative impact on investment, thus weakening the relationship between economic growth and financial development.
Introduction
Natural resources are considered one of the most important national wealth assets globally. Initially, it may be presumed that abundant revenues from natural resources can generate wealth for a country, leading to economic progress and poverty reduction, thus serving as a significant factor in accelerating investment and subsequent economic growth. However, empirical observations in some cases contradict this claim (Sachs and Warner, 2001; Saleh et al., 2020). The detrimental effect of governments' dependence on natural resource revenues has long been of interest to economists and policymakers. Experience shows that natural wealth alone is neither a necessary nor a sufficient factor for economic prosperity and advancement, as evidenced by affluent countries such as Hong Kong, Japan, Singapore, and Switzerland, which have not derived their national wealth from natural resources (Abeysinghe, 2001). Studies indicate that the common denominator among all countries that have benefited greatly from natural resources is the presence of a well-functioning and institutionalized financial system, which channels revenues from natural resources towards productive and infrastructural investments, thereby promoting production growth.
Revenues derived from natural resources, given the development of institutions and financial institutions, and overall financial system development, are effectively allocated to productive economic investments. With increased investment in infrastructure, it strengthens the relationship between financial development and economic growth. On the other hand, abundant revenues from natural resources, if not optimally allocated, can weaken the relationship between financial development and economic growth (Nili & Rastad, 2007). Despite possessing abundant income from natural resources, Iran experienced unstable economic growth over the past three decades. Considering that most studies conducted in Iran have acknowledged the positive relationship between financial development and economic growth, awareness of the profound effects of natural resources on the relationship between financial development and economic growth appears essential for adopting appropriate policies. Therefore, this study endeavors to investigate and analyze the impact of natural resources on the relationship between economic growth and financial development through investment channels. Top of Form
Methods and Material
Considering previous studies such as Sachs and Warner (1999), Harchaoui et al. (2005), Nili and Rastad (2007), and Badiab et al. (2016), along with the theoretical foundations of the research, the model under investigation in this study is based on the neoclassical growth framework. The research modeling will be conducted in several stages using various equations to achieve the main research objective. Initially, the direct impact of oil dependency (resource curse) on economic growth will be examined. Subsequently, in order to investigate the role of investment in the relationship between financial development and economic growth in Iran, the role of investment will be explored, taking into account the influence of oil dependency (resource curse) on this relationship. The degree of indirect influence of oil dependency (resource curse) on the relationship between financial development and economic growth will be determined through the investment channel.
To analyze the empirical long-run and short-run relationship between the model variables during the period from 1980 to 2020 in this study, the Autoregressive Distributed Lag (ARDL) method, introduced by Pesaran et al. (2001), will be utilized.
Results and Discussion
The results obtained from the research indicate that financial development has had a positive impact on economic growth during the examined period, but it is not statistically significant. However, the impact of natural resource abundance and per capita capital on economic growth during the examined period is positive and significant. The estimation of influential factors on investment reveals a positive and significant effect of financial development on investment during the examined period. Furthermore, the coefficient of the interactive variable between financial development and the resource curse suggests that the resource curse weakens the negative relationship between financial development and investment in Iran. This indicates the indirect impact of the resource curse on the relationship between financial development and economic growth through investment in Iran. The interactive variable of financial development and the resource curse also has a negative and significant impact on investment, suggesting that an increase in financial development in the long run leads to a reduction in the positive impact of natural resource abundance on investment in Iran.
Conclusion
Based on the results, it can be said that the financial and banking system in Iran has not been able to channel oil revenues towards productive activities effectively, and resource allocation has not been adequately addressed. The presence of the resource curse has indirectly affected the financial sector, resulting in negative impacts on investment and consequently on the relationship between economic growth and financial development. Additionally, natural resource abundance alone has a positive and significant impact on investment. With increasing oil revenues, government infrastructure expenditures and loans to the private sector also increase, leading to increased investment. Based on the results obtained, signs of the resource curse in the Iranian economy are observable indirectly, and the resource curse has weakened the relationship between financial development and economic growth.
Policy recommendations include focusing on developing the financial system and enhancing the efficiency of the banking sector to better direct financial resources towards productive investments. Additionally, diversifying the economy and developing various sectors, such as industry, services, and agriculture, are crucial to mitigating the risks associated with the resource curse.This can be achieved by increasing the efficiency of financial institutions through enhancing education and efficient resource management.
Yazdan Gudarzi Farahani; Omidali Adeli
Abstract
This study aims to investigate the relationship between currency crises and fluctuations in banking credits in Iran. Utilizing a time-varying coefficients approach spanning from 1989 to 2022, alongside economic boom and recession indicators, the analysis assesses the impact of currency crisis occurrences ...
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This study aims to investigate the relationship between currency crises and fluctuations in banking credits in Iran. Utilizing a time-varying coefficients approach spanning from 1989 to 2022, alongside economic boom and recession indicators, the analysis assesses the impact of currency crisis occurrences on banking credit cycles. The currency crisis index, based on a dummy variable, and the credit cycle index, derived from banking credit booms and busts, are examined alongside the economic cycle, gauged by production fluctuations using intermediate filters. Findings suggest that currency crises influence the occurrence of credit cycles and production facility cycles, while shocks stemming from economic cycles exacerbate currency crises and credit cycles within the banking system. Given the bidirectional relationship observed between the currency crisis index and credit cycles, policymakers are advised to exercise caution in implementing drastic measures during economic fluctuations and credit cycles. Prudent management of currency markets can mitigate the adverse effects of currency crises on economic variables.
Introduction
Financial crises have profound and far-reaching implications, encompassing economic, political, and social spheres. They exact a heavy toll on society, manifesting in reduced welfare, heightened unemployment, and diminished public trust. Given their extensive repercussions across various sectors, financial crises have garnered considerable attention from economic policymakers. Among the diverse forms they take, currency crises stand out as particularly significant. These crises, marked by sudden depreciation or robust intervention by monetary authorities to bolster national currency values through foreign exchange reserve sales, exert widespread influence across the economy. They precipitate pressures on consumers, producers, and central banks, disrupting market dynamics for other assets and impinging on monetary policy frameworks. Moreover, they adversely impact credit allocation within the banking system, underscoring their multifaceted ramifications.
The main question investigated in this article pertains to the interplay between currency crises and credit cycles during the economic upswings and downturns in Iran. Given the nuanced nature of credit cycle delineation, coupled with the fluctuating dynamics of economic expansions and contractions, the vector autoregression (VAR) approach with time-varying coefficients has been employed to examine the evolving dynamics of this relationship spanning the period from 1989 to 2022. This methodological choice is motivated by its ability to yield more realistic findings, accounting for the temporal variability of coefficients and the dynamic interrelationships among variables. This contrasts with traditional time series models and conventional VAR frameworks, thereby enabling the formulation of more informed policy recommendations.
Methods and Material
In this study, credit cycles and currency crises spanning the period from 1989 to 2022 were extracted using the Cristiano and Fitzgerald filters. The relationship between these components and economic expansions and contractions was then explored. Additionally, the dynamic interplay among these variables was assessed using the vector autoregression method with time-varying coefficients (TVP-VAR). The study incorporates four primary variables: the currency crisis index, credit cycle, economic boom and recession periods, and liquidity growth. To compute the currency crisis index, a virtual variable was employed. The data utilized in this research were sourced from the Central Bank's database and statistical quarterly reports.
Results and Discussion
The findings from the TVP-VAR model reveal several significant dynamics. Initially, in response to a shock from the credit cycle, liquidity growth displays a positive reaction, with the impact dissipating over the long term. Conversely, the currency crisis initially reacts negatively to the credit cycle shock but eventually exhibits a positive response, indicating that the creation of the credit cycle contributes to the occurrence of currency crises. The economic cycle, when shocked by the credit cycle, responds negatively. On the other hand, when the credit cycle is shocked by the currency crisis, it initially reacts positively, followed by a subsequent negative reaction, with the long-term effect dissipating. Liquidity growth, in response to the currency crisis shock, demonstrates a positive reaction. Regarding the economic cycle, its response to the currency crisis shock is initially negative, then positive, and eventually negative again, suggesting that currency crises give rise to periods of economic expansion and contraction. In another aspect, the shock from the credit cycle prompts a positive reaction in liquidity growth, while the currency crisis variable responds negatively to the credit cycle shock. Initially, the credit cycle variable reacts positively to the credit cycle shock, but over time, it turns negative, with the impact fading in the long run. Finally, in response to the shock of liquidity growth, the currency crisis variable shows a positive reaction, the economic cycle reacts positively, and the credit cycle also responds positively, with the effect of the shock diminishing over time..
Figure 1. IRF diagram in TVP-VAR model format
Conclusion
The findings from this study highlight the adverse impact of currency crises on the economic cycle, leading to periods of recession. Conversely, economic downturns can exacerbate currency crises. Based on these results, it is advisable for monetary authorities and central banks to refrain from implementing contractionary policies, particularly in foreign exchange policies and credit restrictions, during economic downturns. Instead, they should expedite the process of foreign exchange allocation to economic enterprises for purchasing production inputs, thereby fostering an environment conducive to improving production and stimulating economic growth. Furthermore, during credit crises, commercial banks are encouraged to increase credit limits for commercial enterprises and streamline the loan repayment process in the micro-finance sector. These measures aim to prevent the economy from slipping into recession and promote sustainable economic development.
Sholeh Bagheri Pormehr; Zahra Laki; Hanieh Parnian
Abstract
Economic growth models have long grappled with fundamental questions regarding the relationship between different types of capital and real growth rates. While numerous empirical studies have demonstrated the independent effects of physical capital and social capital on the quantity and quality ...
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Economic growth models have long grappled with fundamental questions regarding the relationship between different types of capital and real growth rates. While numerous empirical studies have demonstrated the independent effects of physical capital and social capital on the quantity and quality of economic growth, less attention has been given to the interactive effects of these investment types. This study examines the influence of social capital on the interaction between physical capital and Iran's economic growth using the Smooth Transition Regression (STR) model. The analysis covers the period 1346–1400 (1967–2021) and employs four indicators inspired by Fukuyama's framework to measure social capital.
The findings indicate that the impact of physical capital on Iran's gross domestic product (GDP) varies across different levels of social capital. Periods of greater fluctuations in social capital have been associated with increased variability in the effect of physical capital on economic growth. Specifically, stronger social capital enhances the productivity of physical capital, while weaker social capital reduces its effectiveness.
This study highlights the critical role of social capital in shaping the returns on physical capital investments, suggesting that strategies to stabilize and strengthen social capital could lead to more consistent and sustainable economic growth outcomes.
Introduction
Economic growth, as a key driver of national welfare, has long captured the attention of not only economists but also social and political scientists. This interest stems from its profound impact on living standards, social stability, and political dynamics. Unstable economic conditions, linked to phenomena such as unemployment, inflation, and disparities in quality of life and life expectancy, can trigger social unrest and political crises. As such, understanding the determinants of economic growth is essential for shaping policies that foster sustainable development and prosperity.
One of the enduring questions in the study of economic growth concerns why nations or regions with similar resource endowments and economic conditions often experience divergent growth trajectories. This question remains partially unresolved, especially regarding the interplay of various forms of capital in driving economic outcomes.
This study focuses on examining the factors influencing Iran's gross domestic product (GDP), with a particular emphasis on the role of social capital in shaping the impact of physical capital over the period 1346–1400 (1967–2021). Specifically, the research investigates the threshold effect of social capital on the interaction between physical capital and GDP, exploring how varying levels of social capital influence the productivity of physical capital in the Iranian context.
A review of prior studies reveals mixed findings regarding the relationship between human capital and economic growth. While some research highlights a positive correlation, others argue that variables such as social capital and the broader developmental context mediate this relationship. Similarly, studies on the role of social capital in economic growth suggest its contribution, albeit often emphasizing its indirect role or relatively modest impact compared to other variables. This study seeks to build on these findings by specifically exploring the interaction between social capital, physical capital, and production, offering new insights into their combined effects on economic growth in Iran.
The study is structured into seven sections. Section 2 reviews the theoretical foundations underpinning the research. Section 3 explores the existing literature and contextual background of the study. Section 4 details the research methodology, while Sections 5 and 6 discuss the data and findings, respectively. Finally, Section 7 presents the conclusions and policy recommendations derived from the analysis.
Methods and Material
While linear estimation methods are simpler and often preferred for their ease of use, they are not always suitable for analyzing economic phenomena with inherently nonlinear behavior. Relying on linear models in such cases can lead to inaccurate specifications and misleading results, underscoring the need for more flexible nonlinear regression models.
In the context of social capital's impact on economic growth, the dynamics differ from the short-term effects of trade shocks or external economic fluctuations, which often have a pendulum-like nature. Instead, the erosion of social capital gradually distorts the economic landscape, exerting a prolonged and subtle influence on growth trajectories. These long-term and incremental changes necessitate a modeling approach capable of capturing both the gradual and nonlinear nature of these effects.
To address this, the Smooth Transition Regression (STR) model was selected for the analysis. The STR model offers significant flexibility by accommodating nonlinear relationships between variables without imposing restrictive or predefined functional forms. This approach allows for the modeling of transitional changes based on observations of the threshold variable, enabling the examination of how variables evolve and interact continuously across regimes.
In essence, the STR model is particularly suited to studying the nonlinear effects of social capital on GDP, as it captures the slow and progressive changes in economic outcomes resulting from variations in social capital. By employing a transfer function, the model identifies regime-dependent behaviors and thresholds, providing a comprehensive framework to analyze the nuanced relationship between social capital, physical capital, and economic growth over the long term.
Conclusion
This study aimed to investigate the role of social capital in the interaction with physical capital and its effect on Iran's GDP. Specifically, it explored how social capital influences economic growth both directly, as a production input, and indirectly, as a threshold variable that modulates the impact of other inputs, including physical capital.
The findings align with the broader literature, underscoring the pivotal role of social capital in differentiating the economic outcomes of nations. Social capital, reflected in the quality of governing institutions, their behavior, and their interactions with society, is confirmed to have a strong, two-way relationship with economic growth. Importantly, previous studies have highlighted that while measuring social capital quantitatively is challenging, its absence (manifested through phenomena such as crime or corruption) provides compelling evidence of its critical role.
Over the 54-year period of analysis (ending in 1400), this study employed Fukuyama's conceptual framework for social capital and utilized a smooth transition regression model with an exponential transfer function. The results validated the hypothesis that social capital significantly influences the interaction between physical capital and economic output. Specifically, periods of greater fluctuations in social capital were associated with more pronounced variations in the effect of physical capital on production.
Given the unique properties of social capital—particularly its tendency to depreciate if not actively utilized—this study recommends adopting strategies to bolster its presence in society. Drawing from the experiences of successful nations, the following steps are proposed:
Encouraging Non-Governmental Organizations (NGOs): Promote the activities of NGOs to foster public participation, especially among youth and elites, thereby building trust and strengthening social networks.
Reversing Brain Drain: Iran’s position as a major exporter of human resources underscores the need for policy reforms that create opportunities for the political participation of diverse groups. Ensuring inclusivity—irrespective of religion or political affiliation—can help rebuild public trust and attract expatriates with human and financial capital.
Strengthening Public Trust: As the cornerstone of social capital, public trust must be prioritized through transparency, equitable governance, and the provision of meaningful social roles for all citizens.
Ultimately, by fostering social capital and leveraging it to enhance the productivity of physical capital, Iran can create the foundation for sustainable economic growth and development.
Mohammad Bagher Shirmehenji; Mahdiyeh Moradizadeh; Mohammad Javad Nourahmadi
Abstract
The theoretical literature on fiscal decentralization has identified several channels for the impact of this policy on economic growth. Some studies emphasize the positive effect of fiscal decentralization on economic growth, while others consider it as a potential factor reducing economic growth ...
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The theoretical literature on fiscal decentralization has identified several channels for the impact of this policy on economic growth. Some studies emphasize the positive effect of fiscal decentralization on economic growth, while others consider it as a potential factor reducing economic growth following its implementation. Due to this theoretical ambiguity, several studies in recent decades have attempted to empirically examine the effect of fiscal decentralization on economic growth. The findings of these studies are diverse and, in some instances, contradictory. To examine and conclude from these different results, this study uses a multilevel meta-analysis approach. To do so, we conducted a comprehensive review of empirical studies in the relevant field and applied a meta-analysis protocol for data selection. Ultimately, we identified 23 cross-country studies comprising 506 regressions and 635 coefficients for analysis. Studies that deviated from the protocol or lacked sufficient information for data extraction were excluded. The combined results of these individual studies, after accounting for publication bias and moderator variables, reveal that fiscal decentralization has a small and positive effect on economic growth. In addition, the results of this study showed that the indicators used to measure fiscal decentralization and economic growth, the period and sample of the countries under review, and the presence or absence of variables such as human capital, physical capital, investment rate, foreign investment, tax revenue, education, unemployment rate, political stability, population growth, urbanization rate, and public sector size in the regression models utilized in individual studies Significantly contribute to explaining the heterogeneity observed in their findings.
Mohsen Mohammadi Khyareh; Amineh Zivari
Abstract
Economic complexity is a relatively new concept developed in recent years to assess the productive characteristics of countries. It not only explains the production structure, but also helps examine differences in income and growth across countries. In this paper, we estimate the macroeconomic ...
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Economic complexity is a relatively new concept developed in recent years to assess the productive characteristics of countries. It not only explains the production structure, but also helps examine differences in income and growth across countries. In this paper, we estimate the macroeconomic impact of economic complexity on growth of a sample of N-11 countries for the period 2000-2020, using the economic complexity index developed by Hidalgo and Hausman (2009). Diagnostic tests confirmed the assumption of slope coefficient heterogeneity and cross-sectional dependence of the error term. Thus, we employ the Pesaran (2006) Common Correlated Effects Mean Group estimator (CCEMG) and the Chudik and Pesaran (2015) Common Correlated Effect Pooled Mean Group (CCEPMG) methodology. The findings suggest that economic complexity is one of the key determinants of long-term economic growth. However, its impact on economic growth is not significant in the short term, suggesting that the impact of changes in production structure on economic growth is time-sensitive. The coefficients of other control variables such as human capital, investment, institutional quality, and inflation rate were statistically significant.
Mohammad Reza Zare Chamazakhti; Zahra Karimi Moughari; Shahryar Zaroki
Abstract
According to principles 29, 31, and 43 of the Constitution of Iran, one of the goals of the Islamic Republic is to deal with poverty and economic and social inequality in the country, and for this purpose, two strategies have been followed in parallel after the revolution. One of these strategies ...
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According to principles 29, 31, and 43 of the Constitution of Iran, one of the goals of the Islamic Republic is to deal with poverty and economic and social inequality in the country, and for this purpose, two strategies have been followed in parallel after the revolution. One of these strategies was the extension and side assistance of the government to fight against poverty and deprivation. In this context, the government implemented policies and plans in the form of economic and social development plans. Therefore, according to this necessity, the aim of the current research is to investigate the impact of economic growth on poverty: comparative studies of the first and third development plans. The results of the estimation of the research model based on the autoregression method with distributed lag indicate that economic growth (from 1978 to 2021) has a positive and significant effect on poverty in the long term, while economic growth (the first and third development plans) and oil rents have a negative and significant effect on poverty, and social security expenses have no effect on poverty in the long term. Therefore, it can be said that economic growth alone is not enough to deal with poverty, but along with the dynamic growth process, improved infrastructure for society (including the poor) and institutional reforms should be implemented in parallel.
Abbas Assari Arani; Saeid Rostami
Abstract
This study examines the impact of energy security on the economic growth of the 10 selected energy exporting countries in the Middle East. The Benchmark model is based on a generalized version of Cobb Douglass’s production function. Ten measures of energy security have been used for ...
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This study examines the impact of energy security on the economic growth of the 10 selected energy exporting countries in the Middle East. The Benchmark model is based on a generalized version of Cobb Douglass’s production function. Ten measures of energy security have been used for the whole set of panels, using five concepts of energy security including, availability, accessibility, acceptability, cost- effectiveness and development capability. The paper uses estimated generalized least squares (EGLS), and panel– corrected standard error (PCSE) to estimate the model. Based on the results, the lack of difference between "energy production" and "energy consumption", has a positive effect on the economic growth of selected Middle Eastern energy exporting countries . Also, "national energy supply ability", "national energy structure", "renewable energy consumption", "carbon dioxide emissions from fossil energy consumption", "political stability" and "oil price" also have a positive effect on the economic growth of these countries. But the amount of "energy intensity" and "the ratio of carbon dioxide emissions to GDP" had a negative impact on their economic growth.
Abbas Shakeri; Elnaz Bagherpur Oskouie
Abstract
This study utilizes the continuous wavelet transform approach and time-frequency domain analysis to shed new light on the causal relationship between land, housing prices, liquidity , and economic growth. According to the results of the research: 1) In the short term (12-month cycle), the ...
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This study utilizes the continuous wavelet transform approach and time-frequency domain analysis to shed new light on the causal relationship between land, housing prices, liquidity , and economic growth. According to the results of the research: 1) In the short term (12-month cycle), the relationship between housing/land prices and liquidity is two-way and direct, while in lower frequencies (long-term), a direct causal relationship from liquidity to the growth of housing/land prices is evident. 2) Analysing the dynamics of the causal relationship between housing/land prices and economic growthindicates a long-term causal relationship between these variables. 3) In the medium and long term, a stable, strong, and in-phase relationship exists between the ratio of liquidity to GDP and the ratio of the housing price index to the price index. This implies that when the liquidity-to-GDP ratio increases, leading to a higher influx of liquidity into the land and housing sector, the housing price index surpasses the overall price index.
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.
Abdol majeed Jalaee; Mahnaz Alibeygi
Abstract
The purpose of this study is to investigate the effect of trade and foreign direct investment on economic growth of OPEC members using the convergence and gravitation model. The model is estimated by the spatial Durbin regression model (SDM) using spatial panel data for the period 2010-2020. ...
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The purpose of this study is to investigate the effect of trade and foreign direct investment on economic growth of OPEC members using the convergence and gravitation model. The model is estimated by the spatial Durbin regression model (SDM) using spatial panel data for the period 2010-2020. Convergence is estimated using cross-sectional data method and gravitation model using panel data method. The results show that foreign direct investment affects economic growth inside and in neighbor countries through spillovers, increasing trade and technology imports in the countries. Also the size of government has no effect on trade and economic growth. The results of convergence and gravitation model show that there is convergence between the target countries and gross domestic product has a positive effect on bilateral trade, but the Linder variable has a negative effect on mutual trade, consistent with the theory.
Ali Asqhar Salem; Habib Morovat; Reza Bakhtiarinejad
Abstract
Nowadays, Information and Communications Technology is growing rapidly due to the considerable increase in using knowledge-based theories in all countries, especially in developing economies such as Iran. As a non-competitive technology with unlimited use capacity, Information and Communications ...
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Nowadays, Information and Communications Technology is growing rapidly due to the considerable increase in using knowledge-based theories in all countries, especially in developing economies such as Iran. As a non-competitive technology with unlimited use capacity, Information and Communications Technology entry in the general application and social life shows its potential to affect social welfare. This study will evaluate the impact of Information and Communications Technology on Sen's Social Welfare Index in Iranian provinces using data from 2011 to 2016. The paper uses Feasible Generalized Least Squares method to capture variance heteroscedasticities and cross-section correlations. The results indicate that Information and Communications Technology has a significant and positive effect on Iranian social welfare. Moreover, variables such as industrialization, government spending, and urbanization have a substantial and positive impact on social welfare. The inflation rate, on the other hand, has a significant and negative effect.
Fereshteh Mohamadian
Abstract
The purpose of this study is to explain the factors affecting the economic growth gap between OPEC and East Asian countries using the Shapley–Owen–Shorrocks and Oaxaca–Blinder variance decomposition methods over the period 1996-2018. The results of the Shapley–Owen–Shorrocks ...
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The purpose of this study is to explain the factors affecting the economic growth gap between OPEC and East Asian countries using the Shapley–Owen–Shorrocks and Oaxaca–Blinder variance decomposition methods over the period 1996-2018. The results of the Shapley–Owen–Shorrocks decomposition reveal that in East Asian countries, institutional and policy variables (government consumption, inflation, rule of law, trade) and human capital explain 53.31 and 31.38 percent of economic growth fluctuations, respectively. In contrast, in OPEC members, institutional and policy variables and physical capital (investment, Fertility rate) explain 66.72 and 17.75 percent of economic growth fluctuations, respectively. According to the results of the Oaxaca–Blinder decomposition, about 43 percent of the economic growth gap between East Asia and OPEC is due to explained components (mainly rule of law, investment, human capital) and 57 percent due to unexplained components (mainly the return of investment, human capital, inflation, rule of law). Accordingly, efficient use of factors in relation to their endowments has a more important role in explaining the economic growth gap of the countries. A noteworthy point in this regard is the important role of institutional and policy variables. Since institutional and policy variables as well as human capital, fertility rate, and investment are greatly influenced by governance, in order to promote economic growth in OPEC, policymaker should focus on the factors improving good governance.
Yousof Eisazadeh Roshan; Majid Aghaiee; Sammaneh Ghasemi
Abstract
The main objective of this study is to investigate the effect of ICT improvement on the effect of financial intermediaries on economic growth in Iran's provinces. For this purpose, according to the classification of the Information Technology Organization, the provinces are divided into two groups of ...
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The main objective of this study is to investigate the effect of ICT improvement on the effect of financial intermediaries on economic growth in Iran's provinces. For this purpose, according to the classification of the Information Technology Organization, the provinces are divided into two groups of provinces with the development of information and communication technology Higher and lower than average. Then, gather information and data required during two five-year periods 2006-2010, 2011-2015 and in the context of dynamic panel models using estimators GMM , the role of ICT in the effectiveness of financial intermediaries on economic growth in the two groups Provinces were tested and checked. The results of this study indicate that, first; the effect of financial intermediaries on the growth in both periods and in both groups of provinces is negative. Secondly: the level of ICT development reduces the negative effect of financial intermediaries on economic growth. Also, according to the results, the impact of the inflation rate and government size on economic growth in both groups of provinces was negative.
Seyed Masih Molana; Abbass Najafizadeh; Ahmad Sarlak; Gholam Ali Haji
Abstract
The purpose of this paper is to examine the effects of financial development on poverty in Iran. In this study, we used the indicators of the stock market and the money market to examine the effect of financial development on poverty. In order to test the relationship between variables, a smoothing transmission ...
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The purpose of this paper is to examine the effects of financial development on poverty in Iran. In this study, we used the indicators of the stock market and the money market to examine the effect of financial development on poverty. In order to test the relationship between variables, a smoothing transmission regression model was used for the period 1989-2016 The results of the model estimation, while confirming the nonlinear impact of financial development on poverty, indicate that Financial development indicators affect the poverty of Iran in the form of a dual regime. So that in the domains of economic growth less and more than 2. 9 percent the impact of financial development indicators on poverty is different and significant. The results indicate that the financial development variable in the banking sector has a negative and significant effect on poverty. In other words, an improvement in the financial development situation in the banking sector has led to a reduction in poverty in the community, But financial development in the capital market has had fewer effects on poverty reduction than financial development in the monetary sector.
Mohsen Mohammadi Khyareh; Nasrin Rostami
Abstract
Many scholars emphasize the importance of economic competitiveness in the improvement of economic growth. However, studies that quantitatively analyze the interconnection between different components of competitiveness in one economy and their impact on economic growth are very limited. Therefore, the ...
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Many scholars emphasize the importance of economic competitiveness in the improvement of economic growth. However, studies that quantitatively analyze the interconnection between different components of competitiveness in one economy and their impact on economic growth are very limited. Therefore, the purpose of this study is to fill the gap in the literature on economic growth and study the effect of competitiveness in different stages of economic development. In this regard, using the data of 81 countries of the World Economic Forum (WEF) in three groups of resource-, efficiency- and innovation-driven countries for years 2008-2017, the relationship between national competitiveness and economic growth is examined through the econometric model of generalized method of Moments (GMM). Our results indicate that the impact of institutions, infrastructure, higher education, business complexity and innovation on economic growth is positive and significant in all three groups of countries. In addition, the impact of labor market efficiency, financial market development and macroeconomic stability has been significant only in inefficiency - and innovation-driven, and the impact of primary education and health had been meaningful only in resource-driven countries. In addition, the effect of the goods market efficiency and market size on economic growth has been significant only in innovation-driven countries and technology-readiness was significant in all but innovation-driven countries. In summary, our estimation results indicate that the impact of competitiveness components on economic growth in different countries varies according to their stage of development.
hossien amiri; raheleh heidari
Abstract
This study presents new evidence on the effects of life insurance, banking and capital market on economic growth in 18 developed and 20 developing countries using Generalized Method of Moments (GMM) approach to dynamic panel data method for years 2000-2016. The results show that in developed countries ...
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This study presents new evidence on the effects of life insurance, banking and capital market on economic growth in 18 developed and 20 developing countries using Generalized Method of Moments (GMM) approach to dynamic panel data method for years 2000-2016. The results show that in developed countries life insurance accelerates economic growth, while the effects of private credit on economic growth are negative and the stock market has not had a significant effect on growth. In developing countries, the results indicate that the stock market can increase economic growth, while the effect of private credit is negative on growth and life insurance has not had a significant effect. Overall, the results suggest that the effects of development in financial activities on growth vary based on the time period, income level, and financial development. That is, countries at different levels of development should engage in different financial activities to ensure sustainable growth.
zahra fazeli; Younes Khodaparast Pirsarayi
Abstract
Export sophistication, which means producing and exporting goods that are more sophisticated and have more value-added, along with economic freedom can influence economic growth in different countries through technological improvement, increasing expertise and encouraging innovation. This study examines ...
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Export sophistication, which means producing and exporting goods that are more sophisticated and have more value-added, along with economic freedom can influence economic growth in different countries through technological improvement, increasing expertise and encouraging innovation. This study examines the effects of export sophistication and economic freedom as factors that influence economic growth in a selection of oil-exporting countries. To meet this end, the export sophistication index is calculated based on Hausman et al. (2007) for period 1998 to 2017. The results indicate that, due to high share of oil and gas in the export basket, the sophistication of exported goods in the select countries is relatively low. However, this index has a positive significant effect on economic growth of select countries with a coefficient of 0.41. The economic freedom index in select countries is close to the global averages and its effect on economic growth is significant and positive with a coefficient of 0.06. Other control variables such as human capital, financial development and gross capital formation are also found statistically significant. Our findings confirm the need for planning to increase sophistication of exports. To achieve this end, apart from producing and exporting goods that are more sophisticated, the development of oil and gas downstream industries, which are capable of producing complex and high value-added goods, should be on the agenda.
Abdolrasoul Ghasemi; Atefeh Taklif; Teymour Mohammadi; fereshteh mohammadian
Abstract
This study is an attempt to present and numerically simulate a dynamic system of energy price-energy supply-economic growth to perform a comparative analysis of strategies for energy intensity reduction in Iran. To achieve this purpose, a nonlinear differential equation system is designed and the data ...
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This study is an attempt to present and numerically simulate a dynamic system of energy price-energy supply-economic growth to perform a comparative analysis of strategies for energy intensity reduction in Iran. To achieve this purpose, a nonlinear differential equation system is designed and the data for total domestic energy production, non-oil GDP and energy price index during period 1992-2014 are used to estimate the parameters of system by means of whale optimization algorithm. In the next stage, four strategies (exploration of new energy sources and imports, moving towards a self-regulatory market, industrial restructuring, and adoption of new energy production and price policies) are addressed based on aforementioned system. The results indicate that the first three strategies will stabilize the energy market, but the fourth strategy will only drive the system into a cyclical shock state. The effects of different individual and combined strategies on energy intensity are also investigated. The results show that under a reasonable control power, these strategies can reduce energy intensity, but an unplanned increase in control power leads to reverse results. As for the energy intensity stabilization under these strategies, the lowest energy intensity is achieved by the third strategy and the lowest time to stabilize energy intensity is under the second strategy. It should be noted that the comprehensive strategy (combination of the first three strategies) outperforms individual strategies both in energy intensity stabilization and energy intensity reduction. Accordingly, implementation of a comprehensive strategy or any of the individual strategies with reasonable control power rather that unconsidered and strict application of a specific strategy, is the best choice for reduction of the national energy intensity in Iran.
Habib Shahbazi; Hossein Moradimokhles
Abstract
In economic growth and development literature, the role of human capital and its development is always considered with great importance. One of the most important types of education in human capital creation is primary (elementary and secondary) education, which is invested by public sector and since ...
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In economic growth and development literature, the role of human capital and its development is always considered with great importance. One of the most important types of education in human capital creation is primary (elementary and secondary) education, which is invested by public sector and since primary education has comprehensive role for society, it is also referred to as general education. Therefore, the role and contribution of public education on GDP and economic growth is one of the fundamental questions for economists in the field of education. There are always many questions about general education. For example, given the budgetary constraints, how much investment should be made in the field of public education? What is the impact of investment and budget allocation to this sector on economic growth? Does spending in public education has led to development of human capital? Do the educational conditions i.e. economies of scale in education and society conditions i.e. risk-taking of individuals affect the impact of general education on human development? These questions are addressed in this paper, with the focus on the effects of different risk-taking scenarios and economies of scale in education on human capital development and economic growth. In this research, we have further developed Teles and Andrade (2008) model to examines the contribution of government public expenditure on primary and secondary education (Ministry of Education) on economic growth in Iran based on various risk-taking and economies of scale in educational scenarios for year 2016. Based on our results, the average contribution of general education on economic growth was 1.141 percentage points with different exact values in different risk-aversion scenarios. But with decreasing risk aversion, primary education contribution on economic growth will increase. In different situations, the effect of general education on economic growth has always been positive but when there is a decreeing return on human capital in national production, there is a negative contribution for risky people. A 1.141 percentage point of primary education contribution to economic growth indicate that 13.7 percent of economic growth in year 2016 (3.8 percent) was the result of investing in primary (elementary and secondary) education.
alireza kazerooni; khatereh alilou; Zana Mozaffari
Abstract
The main goal of every development plan is to achieve economic growth and mass production with considerations for the needs of economy and optimal utilization of resources and capital in the society. Urbanization is one of the most important aspects of the modern society, which embodies significant factors ...
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The main goal of every development plan is to achieve economic growth and mass production with considerations for the needs of economy and optimal utilization of resources and capital in the society. Urbanization is one of the most important aspects of the modern society, which embodies significant factors that can lead to economic growth. Urbanization is the relationship between population, employment, migration, physical construction and human environment, and its development at any time and in any geographical area is influenced by national and international conditions. Today, the effect of foreign direct investment on economic growth has been confirmed by theories and empirical evidence. This study examines the contemporaneous effects of urbanization and foreign direct investment on economic growth in Iranian provinces over period 2006-2015 by using Generalized Moment Method (GMM). Our results show that foreign direct investment, government size, capital stock and human capital index have a positive impact on economic growth in Iranian provinces. However, the effect of urbanization intensity on economic growth has been found to be negative.
Majid Babaie; Hossein Tavakolian; abbas shakeri
Abstract
First studies in inflation forecasting were mostly based on traditional Philips curve in which the relation between inflation and unemployment is studied. However, after several decades and especially after the Lucas criticism, Philips curve faced great takeovers. The new Philips curve ties real and ...
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First studies in inflation forecasting were mostly based on traditional Philips curve in which the relation between inflation and unemployment is studied. However, after several decades and especially after the Lucas criticism, Philips curve faced great takeovers. The new Philips curve ties real and expected inflation, not to unemployment rate but to a scale of the marginal cost. Since in the original form of Philips curve, marginal cost stimulates inflation, it is difficult to formulate models that are effective in predicting inflation. Therefore, using TVP-DMA model, which has the ability to fix these deficiencies, we try to improve predictability of inflation in Iranian economy. An independent variable in conventional models can be either significant or insignificant while in TVP-DMA model, it may be significant during a period of time and insignificant in rest of the times. Therefore, this approach lets us to determine the periods in which an independent variable is significant and when it is not. In this study, we use seasonal data during the period 1991-2015. The results based on outputs of the TVP, DMS, and DMA models show that, out of 100 time periods under study, the liquidity growth rate in 19, economic growth rate in 7, unemployment in 8, exchange rate growth in 31, changes in the bank deposit rate in 14, oil revenues growth rate in 15, inflation uncertainty in 14 and the budget deficit growth rate in 4 periods have significant effect on inflation. Based on these results, it can be stated that exchange rate growth, liquidity growth and oil revenues growth rate are the most important indicators influencing inflation rate in Iran.
sajjad Barkhordari; Maede Abdi; Sedige Solgi
Abstract
After world recession in 2008, many papers focused on non-linear relationship between debt and growth. Based on traditional theories, a medium level of increase in debt can improve welfare and economic growth, but a high level of it damages the economy. According to recent studies, the non-linear relationship ...
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After world recession in 2008, many papers focused on non-linear relationship between debt and growth. Based on traditional theories, a medium level of increase in debt can improve welfare and economic growth, but a high level of it damages the economy. According to recent studies, the non-linear relationship between public debt and growth is conceivable for other debt items such as household debt and firm debt. In this paper, we test the non-linear relationship between household debt and the growth of per capita income in 31 Iranian provinces during period 2005-2015. In addition, we analyses the different threshold points in Iranian provinces related to above-mentioned non-linear relationship. Based on our findings, we accept the hypothesis of reverse-U relationship between debt and growth in addition to the effect of income inequality on heterogeneity of this relationship in Iranian provinces. The results indicate that provinces with high income inequality have high threshold point than regions with low income inequality, but in the latter ones the sensitivity of economic growth to change of debt is higher.
javad taherpoor; teymor mohammadi; reza fardi
Abstract
In Economic literature, different dimensions of financial development have been scrutinized. In this regard, what is important about bank-based financial systems is the distribution of loans and credits among different economic sectors. Actually, in non-competitive markets characterized by imperfect ...
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In Economic literature, different dimensions of financial development have been scrutinized. In this regard, what is important about bank-based financial systems is the distribution of loans and credits among different economic sectors. Actually, in non-competitive markets characterized by imperfect and incomplete information, any sort of distribution of credits and loans which is based on profit maximization for banks will not necessarily result in maximizing the collective interests of a country and it can even have adverse effects for the whole society. With regard to the issue described, this paper aims to study the role of distribution of credits and loans among different sectors on economic growth in Iran. To achieve this goal, we have used and analyzed time series data for the period 1984 to 2015 using Autoregressive Distributed Lag Model (ARDL). The findings of this paper show that the logarithmic coefficient of financial growth index (calculated as the ratio of total outstanding credits to GDP) is positive and significant in both short-term and long-term periods. This means that financial development plays a positive role in economic growth. On the other hand, the estimated coefficient for the ratio of loans allocated to production sectors to loans allocated to non-production sectors is also positive and significant in both short-term and long-term periods. This suggests that loans allocated to production sectors have a positive effect on economic growth. In fact, one can assert that although an increase in bank loans and credits (actually, the ratio of total outstanding loans and credits to GDP) has a positive effect on economic growth, the more these loans and credits are inclined towards production, the more the magnitude of economic growth being stimulated.
Karim Emami
Abstract
Estimations and calculations show that the ICT market in Iran was around 320 billion IRRs in 2015, which is about 2.6% of gross domestic production (GPD). at the end of the sixth plan for social and economic development of Iran, it has been set that this amount should be increased to be more ...
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Estimations and calculations show that the ICT market in Iran was around 320 billion IRRs in 2015, which is about 2.6% of gross domestic production (GPD). at the end of the sixth plan for social and economic development of Iran, it has been set that this amount should be increased to be more than 5% of GDP and to be about 1000 billion IRRs. The present study will answer the following two questions. 1- Is increasing the share of ICT sector in GDP necessary? 2- How much does the economic growth change with one percentage increase in share of ICT sector in GDP? To answer these two questions, contribution of ICT sector on economic growth in Iran is first calculated through two methods of actual and potential contribution and then compared with each other. The results show that average GDP growth in Iran is about 3.8% for the period of 1990-2015 and, based on growth accounting, the potential contribution of ICT on economic growth is about half a percent. Actual contribution of ICT sector on growth has been higher than the potential share, except for years 1990 to 1992. Therefore, increasing value added of ICT sector increases GDP more than the increase of the value added of ICT sector, which is due to knowledge, market and network spillovers. Accordingly, increasing share of ICT sector in GDP is necessary during the sixth plan for economic development in Iran. Moreover, one percent increase in share of ICT sector in GDP increases economic growth at a rate of 0.93 percent.
