Economics Research
https://joer.atu.ac.ir/
Economics Researchendaily1Mon, 21 Mar 2022 00:00:00 +0330Mon, 21 Mar 2022 00:00:00 +0330Welfare Effects of Economic Sanctions :The Case of Iran
https://joer.atu.ac.ir/article_14695.html
&nbsp;Economic sanctions are a low-cost tool that replaces military action with a high economic, political and human cost. The severity of the effects of sanctions depends on the degree of dependence of the target economy on the outside world, the cooperation of the international community with the ones imposing sanctions, and the potential ability to substitute domestic production with imports. If domestic supply is sufficiently resilient, sanctions act, such as an import substitution policy, can lead to higher growth and more employment. Otherwise, sanctions will act as a lack of domestic supply. This study evaluates the welfare effects of sanctions on basic items - whose rising prices affect living standards. We use a multiple choice model and logit function, the income and cost effects of sanctions as well as the impact of exchange rate changes on the price of basic goods on the welfare standard and the probability of households joining the poor group are considered. The results show that, due to the inelastic domestic supply, the possibility of substituting imports is limited, so the cost effects are dominant for the year 2019, in the effective exchange rate scenario, poverty growth is estimated at %2.2 (about 1828 thousand people, and in the official exchange rate scenario, poverty growth is 3.1 percent (and about 2575 thousand People have joined the poor group).Quantifying Supplier Induced Demand Caused by the 2014-Health Reform Plan
https://joer.atu.ac.ir/article_14727.html
&nbsp;The Health Reform Plan was initiated in 2014 aiming to increase health utilization and to reduce the out-of-pocket payment. The plan was criticized for its inflationary effects and also its health induced demand. This study examines the induced demand hypothesis using the health datasets of the year&nbsp; 2008 (before the reform) and the year 2015 (after the reform). The data is collected every four years by the National Institute of Health Research. As the control group, we consider individuals who have accessed to medical knowledge among their family members and are less exposed to the asymmetric information; thus they can be considered as the control group for whom there is no induced demand.&nbsp; Individuals without medical knowledge are more likely to be exposed to induced demand by physicians, and are considered as the treatment group. We use Difference-in-Difference methodology. The robustness of results are tested using variety of subgroups and controlling for many observation. Results indicate that individuals without medical knowledge has an average of 10% more referrals compared to those who have medical knowledge. Also, their per capita cost has been increased by 54%, which is equivalent to extra 10650 tomans after the reform. Our results confirm that the reform has significantly induced demand.Testing for Asset Pricing Model based on Sentiment Indexes: SAPM Model
https://joer.atu.ac.ir/article_14697.html
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The purpose of this article is to investigate the effect of behavioral deviations on the pricing of financial assets with the assumption that sentiment is an important and relevant risk factor in the Iranian capital market. This paper also examines the effect of sentiment, momentum, size, value, and market risk premium by estimating the Multi-Factor Asset Pricing Model (APT). In order to perform empirical analysis, the quarterly returns of companies listed on the Tehran Stock Exchange in the period 2010-2019 in the form of 18 stock exchange groups including 63 listed companies are used. Using two indicators of market turnover sentiment. &nbsp;and sentiment effect. we estimate the sentiment index and by extending the Carhart model and considering two sentiment variables in the form of SAPM model, coefficients estimate by using Hausman-Taylor panel data method. The results of the model show that in the SAPM model, the sentiment variable is very important and significant and have a positive relationship with the average seasonal rate of return of different stock exchange groups.The Effect of Central Bank Transparency on Macroeconomic Stability in Emerging Economies
https://joer.atu.ac.ir/article_14698.html
&nbsp;Macroeconomic instability is an important obstacle to the real growth of the economy and its sustainability. In this article, two methods have been used to investigate the impact of transparency on macroeconomic stability in emerging economies using simultaneous equations with panel data for the period 1998-2014. In the first method, two equations for central bank transparency and stability have been considered and the mutual effect of these two variables has been investigated. In the second method, three equations for the variables of stability, including inflation, production gap and real exchange rate gap, and one equation to measure the effect of these variables on transparency are used simultaneously. The results of the study show that the transparency of the central bank is one of the factors affecting the stability of the macroeconomics. Also, the square of the central bank's transparency variable has a negative and significant relationship with macroeconomic stability. Meanwhile, the transparency of the central bank has an inverse relationship with inflation and the real exchange rate gap, and there is a two-way relationship between the transparency of the central bank and inflation. Finally, the effect of central bank transparency on production gap and vice versa is not significant.The Impact of Energy Security on the Economic Growth
https://joer.atu.ac.ir/article_14696.html
&nbsp;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&rsquo;s production function.&nbsp; 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&ndash; 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.Comparison of Classical and Dynamic Network Models Efficiency in the Application of Generalized Network Autoregressive Models
https://joer.atu.ac.ir/article_14699.html
&nbsp;One of the most challenging issues in forecasting economic variables is the lack of sufficient data or&nbsp; the missing data in time series. In this paper, the time series of the GDP growth rate from 1980 to 2019 for 18 Middle East and North African countries is modeled via a generalized network autoregressive model. Of the total observations, 13.42% were missed. In the proposed model, a random network is applied to the data for which nodes represent countries or related time series. Then, an autoregressive model of each node was constructed based on all the data of its multi-stage neighboring nodes. Some parameters of the model may depend on the node (local model) or can be considered the same for all network nodes (global model). The missing data are modeled by changing the weights of the network edges. Finally, the time series was predicted based on the constructed model. Because the network structure affects the model and ultimately the forecast, and on the other hand it is difficult to examine all possible networks, ten thousand un-directional random networks and 16 models including 8 local models and 8 global models on each network are considered. Out of 160,000 models, the network and the model with the least prediction error are selected as the best network and model that are used for the main prediction. The lowest in-sample predictive error was obtained at a local network, which has 64 edges and the number of corresponding model parameters is 4. Finally, the model is compared with the classical models such as AR and VAR. The results indicate the superiority of the proposed method in significantly reducing the prediction error over the AR and VAR models.Measuring Acute Multidimensional Poverty with Missing Indicators:
Applications to Alkire-Foster MPI and Its Dimensional Break-down in Iran
https://joer.atu.ac.ir/article_14700.html
Although importance of considering capability approach in calculating poverty has been addressed in various studies, a major obstacle to achieving a measure like Alkire-Foster MPI in many countries is lack of integrated micro indicators. In this study, to tackle this challenge we suggest &quot;repeated and random data generation&quot; method using macro amount of the missing indicator. Moreover, we apply this method to calculate and break down acute poverty measure of Alkier and Foster in Iran. The results indicate that, using this method, we are able to achieve the desired level with a very high precision. In addition, by breaking down multidimensional poverty into three dimensions of health, education and standard of living, we show that during last four decades, the share of educational deprivation in MPI is always increasing and has transformed to the most effective indicator in acute multidimensional poverty. Finally, by examining the characteristics of poor households, it can be noted that households with acute poverty have gradually become older, smaller and less educated. Therefore, it seems that programs like subsidies to the entire society are no longer useful policy for poverty in Iran and it is recommended to improve targeting and work on educational deprivation.Investigation of the nonlinear transportation infrastructure effects on industrial energy efficiency in Iran provinces using a panel threshold model
https://joer.atu.ac.ir/article_14728.html
The goal of this study is to analyze the effect of its transportation infrastructure on the energy efficiency of the industry in the provinces of Iran. The rapid growth of industries in the world during the last few years has led to an increase in energy consumption and carbon dioxide emissions.One of the factors affecting energy efficiency is transportation infrastructure, which, as the main capital of social development, can affect energy efficiency through various mechanisms. These infrastructures can have different effects on energy efficiency from the channels of the economy of scale, the effect of technology spillover and other external factors, and the effect of competition between production enterprises. A panel threshold model was applied to approximate the threshold effect of transportation infrastructure on industrial energy efficiency under the Real GDP by using the panel data of 31 provinces of Iran from 2006 to 2019 The results showed that the transportation infrastructures it has a non-linear effect on energy efficiency so that when the logarithm of real GDP is higher than the second threshold (15/66), transportation infrastructures significantly improve energy efficiency, and when the logarithm of GDP is lower than the first threshold (14/64). The expansion of this type of infrastructure reduces the energy efficiency of the industry, and between the two thresholds of transportation infrastructure, it does not affect the energy efficiency of the industry. In addition, technological progress and energy prices also have a positive and, significant effect on Industrial energy efficiency.Rule-based Micro and Macro Prudential Policy in a Heterogeneous Banking Network
https://joer.atu.ac.ir/article_14701.html
This paper investigates the effects of rule-based prudential policies on the banks competition in the deposit market. Using the imperfect competition structure and focusing on heterogeneous banks, we develop a partial equilibrium model, under which implications of how capital adequacy ratio regulation implemented either discriminatory between banks (micro) or non-discriminatory and uniformly for all banks (macro) will be analyzed. Among the features that are emphasized in this analytical model is the role of self-regulation of bank capital in building confidence in the banking network in a non-linear manner. This, in a range of capital adequacy ratios, has featured the use of that prudential policy tool as a self-defeating one for the policy maker&#039;s goal in curbing the portion of high-risk projects in the targeted bank&#039;s assets portfolio. Further, a channel to explain the role of monetary policy in establishing stability or fragility of the banking network is introduced. In particular, the the role of investors&#039; degree of risk aversion in motivating banks to set their monitoring efforts has been evaluated.The Socio-Economic Determinants of ICT Consumption Expenditure in Iranian Urban Households using Heckman's two-stage method.v
https://joer.atu.ac.ir/article_14822.html
Over the last decade, there has been a clear increase in ICT expenditure by households, both in value and as a proportion of total expenditure. Such a trend, however, has not affected all households in the same way. This study analyses the socio-economic determinants of urban household expenditures on ICT goods and services in Iran in 1398, based on micro data from the Household Budget Surveys. For this, Heckman two-stage model has been applied in order to identify the factors affecting the probability of spending and the level of expenditures on ICT, as well as its components (IT goods, IT services, communication goods and communication services). Based on the results, percapita income has a significant and positive effect both on the probability to spend and the level of percapita ICT expenditure. If the household&rsquo;s head is a man, it has an increasing effect for the probability of spending, but a decreasing effect for the level of ICT expenditure. Households with bigger sizes and the households which have a married head, are more likely to spend on ICT. The impact of education level and age of the household&rsquo;s head on both the probability to consume and the amount spent, is positive and significant. There is a negative quadratic relationship between age of the houshold&rsquo;s head and both the probability to spend and the level of percapita ICT expenditure. Furthermore, consumption economies of scale exist in ICT expenditures.