Cyclicality Behaviour of Fiscal Policy in Iran; A Survey

Ghasemi, Mohamad; Mohajeri, Parisa

Editorial

Authors

Assistant Professor, Allameh Tabataba`i University

Abstract

Economic fluctuations and emergence of commercial cycles are inseparable parts of any economy. It is obvious that anti-cyclical behaviour of fiscal policies will stabilize the fluctuations. In fact, if the ratio of government expenditure to GDP decreases (increases) during a boom (recession) the behaviour of fiscal policy will be anti-cyclical. In this paper, using data released by the Central Bank for the period between 1966 and 2013, a model has been developed to test the anti-cyclical behaviour of fiscal policies in the Islamic Republic of Iran. The Findings of this paper indicate that, firstly, regardless of the calculation method of time series of GDP fluctuations– Hodrick-Prescott and State-Space models– the hypothesis of Iran’s anti-cyclical fiscal policies is rejected. Secondly, Nonconformity of financial rules and means of injection of resources resulted from oil export into government budget are two crucial issues explaining why Iran’s fiscal policies are not anti-cyclical. Thus, institutional reforms, especially budgetary structure of the country, could improve the performance of fiscal policies during the economic cycles

Keywords

References

ابونوری، اسمعیل، سعید کریمی پتانلار و محمدرضا مردانی (1389)، «اثر سیاست مالی بر متغیرهای کلان اقتصاد ایران: رهیافتی از روش خودرگرسیون برداری»، پژوهشنامه اقتصادی، سال دهم، شماره سوم، پاییز 1389، صفحات 143-117.

دفتر مطالعات برنامه و بودجه (1381)، بودجه‌ریزی در ایران (مسائل و چالش‌ها)، مرکز پژوهش‌های مجلس شورای اسلامی، چاپ اول، تهران.

کاوند، حسین و فریده باقری (1385)، «محاسبه شکاف تولید ناخالص داخلی با استفاده از یک مدل فضا-حالت»، مجله دانش و توسعه، شماره 21، نیمسال دوم، صفحات 135-119.

خلعتبری، فیروزه (1385)، «کسری بودجه و تورم در ایران؛ 1383-1354»، دو فصلنامه علمی-پژوهشی جستارهای اقتصادی، سال سوم، شماره ششم، پاییز و زمستان 1385، صفحات 214-189.

سازمان مدیریت و برنامه ریزی کشور (1384)، گزارش اقتصادی سال 1383 و نظارت بر عملکرد پنج ساله برنامه سوم توسعه، مرکز مدارک علمی و انتشارات.

صمدی، علی‌حسین و سکینه اوجی‌مهر (1390)، «ارزیابی ماهیت سیاست مالی و بررسی خاصیت رفتار ادواری آن: مورد ایران (1386-1353)»، دو فصلنامه علمی-پژوهشی جستارهای اقتصادی، سال هشتم، شماره شانزدهم، پاییز و زمستان 1390، صفحات 75-49.

معاونت برنامه ریزی و نظارت راهبردی رییس جمهور (1390)، گزارش اقتصادی سال 1388 و نظارت بر عملکرد پنج ساله برنامه چهارم توسعه، مرکز داده ورزی و اطلاع رسانی.

هژبر کیانی، کامبیز و محمد نقیبی (1391)، «برآورد ارزش افزوده بالقوه در بخش‌های عمده اقتصادی ایران با روش فیلتر کالمن»، فصلنامه اقتصاد کاربردی، سال سوم، شماره هشتم، بهار 1391، صفحات 77-57.

Alesina, A., F. Campante and G. Tabellini, (2008, “Why is Fiscal Policy often Procyclical?” Journal of European Economic Association, 6(5), 1006-1036.

Auerbach, Alan J. and Yuriy Gorodnichenko (2013), “Measuring the Output Responses to Fiscal Policy”, National Bureau of Economic Research (NBER) Working Paper Series, Augus, PP 1-41.

Bahmani-Oskooee, Mohsen (1996), “Source of Stagflation in an Oil-Producing Country: Evidence from Iran”, Journal of Post Keynesian Economics, Vol. 18, No. 4, PP 609-620.

Bahmani-Oskooee, Mohsen (1995), “Source of Inflation in
Post-Recovery in Iran”, International Economic Journal, Vol. 9, PP 61-72.

Barseghyan, Levo, Marco Battaglini and Stephen Coate (2013), “Fiscal Policy over the Real Business Cycle: A Positive Theory”, Department of Economics, Princeton and Cornell University,
pp. 1-53.

Barro, R. (1979), “On the Determination of the Public Debt”, Journal of Political Economy, Vol. 87, PP 940-971.

Barro, R. (1986), “U.S. Deficits since World War I”, Scandinavian Journal of Economics, Vol. 88(1), PP 195-222.

Calderón, César and Klaus Schmidt-Hebbel (2008), “Business Cycles and Fiscal Policies: The Role of Institutions and Financial Markets”, Central Bank of Chile, Working Paper, August, pp. 1-68.

Cicek, Deniz and Ceyhun Elgin (2011), “Cyclicality of Fiscal Policy and Shadow Economy”, Empirical Economics, Vol. 41, No. 3, PP 725-737.

Gavin, M. and R. Perotti (1997), “Fiscal Policy in Latin America”, in B. Bernanke and J. Rotemberg, eds., NBER Macroeconomics Annual.

Gervais, Martin and Alessandro Mennuni (2009), “Optimal Fiscal Policy over the Business CycleRevisited”, Journal of Economic Literature, November, PP 1-24.

Lane, P. (1998), “On the Cyclicality of Irish Fiscal Policy”, The Economic and Social Review, Vol. 29, No. 1, PP 1-16.

Lane, P. (2003), “The Cyclical Behavior of Fiscal Policy: Evidence from the OECD”, Journal of Public Economics, Vol. 87,
PP 2661-2675.

Lee, Young and Taeyoon Sung (2005), “Fiscal Policy, Business Cycles and Economic Stabilization: Evidence from Industrial and Developing Countries”, Hanyang University, March, PP 1-27.

Leith, Campcbell and Simon Wern-Lewis (2006), “Fiscal Stabilisation Policy and Fiscal Institutions”, World Economy and Finance Research Programme, ISSN 1749-8279, March, PP 1-24.

Lutkepohl, Helmut (2005), New Introduction to Multiple Time Series Analysis, Springer.

Sabir, Samina and Khushbakht Zahid (2012), “Macroeconomic Policies and Business Cycle: The Role of Institutions in Selected SAAARC Countries”, The Pakistan Development Review, Vol. 51, No. 4, PP 147-160.

Sorensen, B., L. Wu and O. Yosha (2001), “Output Fluctuations and Fiscal Policy: U.S. State and Local Governments 1978-1994”, European Economic Review, Vol. 45, PP 1271-1310.

Staehr, Karsten (2008), “Fiscal Policies and Business Cycles in Anenlarged Euro Area”, Economic Systems, Vol. 32, PP 46-69.

Sturm, Michael; Francois Gurtner and Juan Gonzalez Alegre (2009), “Fiscal Policy Challenges in Oil-Exporting Countries; A Review of Key Issues”, Occasional Paper Series, European Central Bank,
No. 104.

Talvi, E. and C. Vegh (2005), “Tax Base Variability and Pro-cyclical Fiscal Policy”, Journal of Development Economics, Vol. 78, PP 156-190.

Tornell A. and P. Lane (1999), “The Voracity Effect”, American Economic Review, Vol. 89, PP 22-46.

William H. Branson (1986), “Stabilization, Stagflation and Investment Incentives: The Case of Kenya 1979-1980”, in NBER book Economic Adjustment and Exchange Rates in Developing Countries.

Woo, J. (2009), “Why Do More Polarized Countries Run More
Pro-Cyclical Fiscal Policy?”, Review of Economics and Statistics, 91(4), 850—870.

Economics Research

Cyclicality Behaviour of Fiscal Policy in Iran; A Survey

References

References

Volume 15, Issue 56 - Serial Number 1
April 2015
Pages 75-104

Cyclicality Behaviour of Fiscal Policy in Iran; A Survey

References

References

Volume 15, Issue 56 - Serial Number 1April 2015Pages 75-104

Volume 15, Issue 56 - Serial Number 1
April 2015
Pages 75-104