The Economy of Iran
Ali Motavasseli
Abstract
The elasticity of aggregate output with respect to aggregate capital and labor is computed using cost structure of the production network of Iran economy without imposing an aggregate production function. Estimations are made using Input-Output tables and according to a method developed by Baqaee and ...
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The elasticity of aggregate output with respect to aggregate capital and labor is computed using cost structure of the production network of Iran economy without imposing an aggregate production function. Estimations are made using Input-Output tables and according to a method developed by Baqaee and Farhi (2019, 2020). Elasticities are computed for years 1986, 1999, 2001, 2004, 2010, 2011 and 2016. Various assumptions regarding capital costs of production sectors leads to lower and upper bounds for capital elasticity. The bounds for capital elasticity of Iran economy was 0.15-0.35 in 1986, up to 0.22-0.55 in 1999, 2001 and 2004, even higher to 0.28-0.59 in 2010 and 2011 and down to 0.21-0.42 in 2016. Labor elasticities are one minus capital elasticities. Starting from 1986, the bounds for capital elasticity steadily increased until beginning of 2010s and fell afterwards. For the nonoil economy, the bounds for capital elasticity and the spread between those bounds are smaller than the whole economy. The bounds for nonoil economy are 0.15-0.32 in 1986, up to 0.17-0.47 for 1999 till 2011 and 0.17-0.35 in 2016. The results show that ignoring labor compensation from unincorporated sectors of the economy increases the capital elasticity by at least 0.17 point. Our estimations can be used for robustness check and sensitivity analysis wherever capital and labor elasticities are needed, such as growth accounting.
The Economy of Iran
ali asghar banouei; afsane sherkat; Fatemeh Bazzazan; Somayeh Shahhosseini; Azin KianiRad
Abstract
In this article three types of tables followed by a modified table of 2016 of central bank for understanding the changes from the first generation of statistical base to the second generation data base requirements of the new international trade theory are introduced. The third type of table plays a ...
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In this article three types of tables followed by a modified table of 2016 of central bank for understanding the changes from the first generation of statistical base to the second generation data base requirements of the new international trade theory are introduced. The third type of table plays a key role and is considered as starting point for such changes. Considering the absence of such a table in Iran, this article raises three issues, followed by three main questions: First, if official compilers do not attempt to compile such a table soon, what solution can be proposed? Second, as compared to the modified tables, which one of the two types of tables has more stastistical errors? Third, in measuring value-added content in gross exports which one of the two tables is preferred? The latest SUT and intermediate import use table of 2016 that are provided by central bank are used to investigate three questions. The overall findings reveal that: The estimate of the third type of table can circumvent Iran. As compared to the second table, the third table has relatively less statistical errors. Finally, as compared to second table, the third table has edge over in measuring value added content in gross exports.
