Mansour Mohamadi Dinani; Hossein Akbari
Volume 2, Issue 7 , February 2001, , Pages 67-78
Abstract
Demand side policy effectiveness on potable water consumption in Kerman is investigated by estimating demand function using 1998-99 panel data. Results show that water demand is price inelastic (-0.15 through -0.22). Income elasticity of demand (0.11-0.025) indicates that water is an essential good in ...
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Demand side policy effectiveness on potable water consumption in Kerman is investigated by estimating demand function using 1998-99 panel data. Results show that water demand is price inelastic (-0.15 through -0.22). Income elasticity of demand (0.11-0.025) indicates that water is an essential good in the budget of households in Kerman Additionally economies of scale (household members) shows that one member increase to household will decrease. 0.72 cubic meter per capita water consumption per month. The results show that the size of the residence has a positive significant effect but the use of sprinkling doesn't have any significant effect on per capita water consumption.
Farrokh Masjedi
Volume 4, Issue 10 , April 2002, , Pages 67-103
Abstract
Comparison of countries development is one of the topics of interest to Economists, as well as international organizations. Human Development Index (HDI) has shown that there is possibility to use a unique, index to explain multilateral expanded phenomenon of development.This essay surveys the HDI and ...
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Comparison of countries development is one of the topics of interest to Economists, as well as international organizations. Human Development Index (HDI) has shown that there is possibility to use a unique, index to explain multilateral expanded phenomenon of development.This essay surveys the HDI and its shortcomings and tries to develop a unique index for measuring countries development by using two techniques of Factor Analysis and Numeric Taxonomy. In this index about 90 variables are used to take into account various economic, social and political factors affecting economic development. Obviously, this method has many disadvantages, which should be discussed. The Index is applied to 100 countries.
mohammad alizadeh; Seyed Ehsan Hosseinidoust; Abolghasem Golkhandan
Abstract
From a financial perspective, decentralization is a transfer of resources from the central government to local governments. Fiscal decentralization policies can lead to more FDI attraction by increasing the share of provincial government funding to local infrastructure.Accordingly, the major purpose ...
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From a financial perspective, decentralization is a transfer of resources from the central government to local governments. Fiscal decentralization policies can lead to more FDI attraction by increasing the share of provincial government funding to local infrastructure.Accordingly, the major purpose of this study is to evaluate the long run and short run impact of fiscal decentralization on FDI in Iran during the period 1992-2014. For this purpose the three indicators of fiscal decentralization of revenue, fiscal decentralization of expenditures, fiscal decentralization of autonomy power and also some control variables including inflation, exchange rate fluctuations, and degree of trade openness have been used.In order to estimate the model, the Johansen-Juselius method and Vector Error Correction Model (VECM) have been applied. Based on the results of the model, all three fiscal decentralization indicators increase FDI in the long run and in the short run. Therefore, providing the necessary conditions for the expansion of fiscal decentralization can help to promote the FDI level in Iran.Also, both in the long run and the short run, inflation and exchange rate fluctuations have a negative effect, and the degree of trade openness has a positive effect on FDI.
Abbas Shakeri
Volume 7, Issue 23 , July 2005, , Pages 69-93
Abstract
In this paper, attention is made to study the foundations, patterns, assumptions, logics and hypothesis of macro-economic studies. Also, we try to search the causes of delay in the emergence of macro-economics in relation to micro-economics. Then we shall discuss the Keynesian revolution and analyze ...
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In this paper, attention is made to study the foundations, patterns, assumptions, logics and hypothesis of macro-economic studies. Also, we try to search the causes of delay in the emergence of macro-economics in relation to micro-economics. Then we shall discuss the Keynesian revolution and analyze the frameworks of macro functional equations.
The main emphasis would be on the conditions and assumptions of Keynesian, post-Keynesian, Hicks-Hansen and Friedman theories. We shall also discuss the rational expectations theories and the cause and effect relationship of different conditions in the framework of macro-economic theories. The purpose of this paper is to highlight the importance of subjects, positions and notions of macroeconomics for the researchers and students.
Mohammad Reza Asgari Oskoei
Volume 4, Issue 12 , October 2002, , Pages 69-96
Abstract
Application of non-classical methods in modeling complex systems and forecasting their behavior has become as more as usual for the scientists and professionals. In most complex systems, especially in non-linear systems, application of classical methods is very difficult or even useless. Non-classical ...
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Application of non-classical methods in modeling complex systems and forecasting their behavior has become as more as usual for the scientists and professionals. In most complex systems, especially in non-linear systems, application of classical methods is very difficult or even useless. Non-classical methods are intelligent, knowledge-based, very flexible, and therefore effective in modeling and forecasting. Neural Networks are one of the well-known and innovative nonclassical methods, which have being used in modeling, pattern recognition, clustering and forecasting. This paper tries to predict the economic time series by neural nets. Economic time series are considered as outputs of complex and non-linear economic systems, which can be modeled and forecasted by the neural nets.It has been shown that the performance of neural nets (as prediction machine) is very sensitive and dependent on the structure, size, and learning method of neural nets. In this paper, using MATLAB neural nets toolbox, some Iranian economic time series are being used as case studies for the neural network application.
Mehdi Sadeghi Shahdani; Mohammad Reza Esmaeili
Volume 16, Issue 49 , February 2012, , Pages 71-97
Abstract
Islamic economics is a new concern that has attracted the attention of most Muslim economists. This paper aims to better understanding of the future of Islamic economics by classifying of Muslim economist's theories in two distinct approach "Islamic economics as an adduct" and "Islamic economics as an ...
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Islamic economics is a new concern that has attracted the attention of most Muslim economists. This paper aims to better understanding of the future of Islamic economics by classifying of Muslim economist's theories in two distinct approach "Islamic economics as an adduct" and "Islamic economics as an adjectival compound". The first approach is limited to the jurisprudence discussion in economics against the second approach that can be much extensive. This article, considers an integrated approach in order to avoid the current dichotomy. Also with this approach we still have an adjectival compound but with an improved vision and so it be can considered as a more advanced approach in comparison to pervious approaches. The non-disciplinarity approach is also applicable in a variety of methods such as interdisciplinary approach
Esmaiel Abounoori; Najmeh Gholami
Volume 13, Issue 39 , July 2009, , Pages 71-53
Abstract
In this study, nominal & real average compensated wage has been computed for woman & man in each industry during 1999-2005, then the effect of gender on the average compensated wage are estimated using regression analysis of variance. The results indicate that the highest shock (highest ...
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In this study, nominal & real average compensated wage has been computed for woman & man in each industry during 1999-2005, then the effect of gender on the average compensated wage are estimated using regression analysis of variance. The results indicate that the highest shock (highest coefficient of variation) in the per capita compensated wage for men as well as women, has happened in "Manufacture of office, accounting and computing machinery", while the lowest fluctuation has happened in "Manufacture of tobacco products", "Tanning and dressing of leather; manufacture of luggage, handbags, saddler, harness and footwear" for man & woman employees, respectively. The interesting point in this research is that, assuming other things equal, the real average compensated wage for women employees has been less than that of men by about 4220000 Rials per annul. Of course this gap, may be due to more overtime work, level of experience, level of skills and educations of the men comparing that of the woman’s, which have not been considered in this study.
Abdolrahim Badamchizadeh; Narges Heydari
Abstract
An Asian option (or average value option) is a special type of option contract. Its payoff is determined by the average underlying price over some pre-set period of time. Asian option is hard to price analytically and numerically. There is no exact solution for these options ...
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An Asian option (or average value option) is a special type of option contract. Its payoff is determined by the average underlying price over some pre-set period of time. Asian option is hard to price analytically and numerically. There is no exact solution for these options in the Black-Scholes environment. Lower and upper bounds formula for these options have been derived by Rogers and Shi(1995). This difference between the upper and lower bound is independent of the exercise price. In this paper we develop lower and upper bounds in which the difference between lower and upper bounds depends on the exercise price.
Hassan Heidari; Ahmad Molabahrami
Volume 18, Issue 56 , October 2013, , Pages 73-93
Abstract
This study employs a dynamic stochastic general equilibrium (DSGE) model for energy demand side, in order to estimate the energy share of non-oil production and investigate the effects of energy price shocks on production and inflation. The results show that, the share of energy in production is 12.1 ...
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This study employs a dynamic stochastic general equilibrium (DSGE) model for energy demand side, in order to estimate the energy share of non-oil production and investigate the effects of energy price shocks on production and inflation. The results show that, the share of energy in production is 12.1 percent in Iran which is 8 times higher than of European countries. In addition, positive shocks of energy price have negative effects on production and also these shocks have positive effects on inflation and money supply. These results emphasize the significant role of energy in non-oil production in Iran which in turn is the relative advantages of cheapness and abundance of energy resources. Thus in the second phase of removing plan subsidy, the role of energy in production should be considered. In fact, the government must provide necessary background in order to convert the old technologies into modern and more efficient technologies, in addition to allocating the special energy subsides to production sector.
Gholam Reza K. Haddad; Mohammad Ghodsi Gharab
Volume 19, Issue 59 , July 2014, , Pages 73-116
Abstract
Average females’ age in the first marriage was increasing in Iran over the last two decades from 20.9 in 1991 to 22.7 in 2010. It is well accepted that labor market prospects and the males’ wage structure are the main determinants of preference toward marriage among others. Making use of ...
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Average females’ age in the first marriage was increasing in Iran over the last two decades from 20.9 in 1991 to 22.7 in 2010. It is well accepted that labor market prospects and the males’ wage structure are the main determinants of preference toward marriage among others. Making use of a province-wide panel data and micro individualized data (Household income and expenditure survey) for provinces, this research aims to examine the role of males’ wage inequality in the marriage rate across provinces and the probit cross-section models of preferences toward marriage in Iran. In the framework of search and match theory of marriage our findings reveal that wage inequality and gender ratio have negative impact on the marriage decision, but males’ wage over females has positive and significant effect on the marriage rate and marriage decision. These results are rather robust across the several cross-section probit models.
Esfandiyar Jahangard
Abstract
The Iranian economy suffers from low economic growth despite having access to enormous reserves of natural resources. The role of investment rate as the driving force of economic growth has been the focus of much debate among macroeconomists. This raises an important question: Why does growth in Iran ...
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The Iranian economy suffers from low economic growth despite having access to enormous reserves of natural resources. The role of investment rate as the driving force of economic growth has been the focus of much debate among macroeconomists. This raises an important question: Why does growth in Iran remain low despite of high investment? One way to answer this question is to look at the relationship between economic structures and performances. Contributing to the literature in the field, we incorporate intermediate goods in our calculation of inter sectoral resource allocation for the purposes of production analysis over the period of 1973-2011. Five national input-output tables for the years of 1973, 1986, 1991, 2001 and 2011 consisting of 19 sectors in current prices have been used in this study. The results showed that the average production multiplier is 1.8. The overall findings revealed that the structural transformation has shifted from agriculture to some industries and service sectors which differs from the experiences of developing and developed countries.
zahra najafi; Majid Sameti; Karim Azarbayjani
Abstract
Over the past few decades, intra-industry trade has become one of the most important issues of international concern. Iran needs a model to further its economic goals and improve its business relations with its major trading partners in non-oil industries. Therefore, in this study, with a particular ...
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Over the past few decades, intra-industry trade has become one of the most important issues of international concern. Iran needs a model to further its economic goals and improve its business relations with its major trading partners in non-oil industries. Therefore, in this study, with a particular attention to the industry of riding cars and the role of the key components of innovation and the size of the government at the macro and economic level, the linear and nonlinear relationship between these variables is examined. According to the results, nonlinear relationship (inverse-U) between the innovation variable and commercial vehicle trade has been confirmed. Also, government size has had a positive and significant impact on the trade of this industry. Linder markers and geographical distances as control variables have not had a significant effect on the level of business of riding cars, and membership variables in the WTO and ECO have contributed to the expansion of trade in this industry.
Saeed Moshiri; Kamran Pakizeh; Manoochehr Dabirian; Abolfazl Jafari
Volume 14, Issue 42 , April 2010, , Pages 74-55
Abstract
Investors in stock markets are concerned about the inflation effect on their returns. However, the impact varies based on investment horizons. Since investors have different attitudes and diverse investment horizons, studying the relationship between inflation and stock returns in different time ...
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Investors in stock markets are concerned about the inflation effect on their returns. However, the impact varies based on investment horizons. Since investors have different attitudes and diverse investment horizons, studying the relationship between inflation and stock returns in different time scales would have great implications for their investment. In this paper, we examine the Fisher hypothesis, which denotes a positive relationship between nominal stock return and inflation rate, using a wavelet multi-scaling method that decomposes a given time series on a scale-by-scale basis. The wavelet approach based on time-scale decomposition provides a valuable means of testing the Fisher hypothesis and resolves the problem of conflicting results in the literature. Our results show a negative relationship between inflation and the TSE returns in short-run horizon and a positive relationship in long-run horizon.
Soheila Parvin; Abbas Shakeri; Azam Ahmadian
Volume 19, Issue 58 , April 2014, , Pages 77-115
Abstract
In the area of monetary policy, interest rate is regarded as a direct monetary instrument and required reserve ratio is as an indirect monetary instrument which in Iran, they are enforced by the monetary authorities to the banking system and will affect its behavior. In this paper, we study the balance ...
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In the area of monetary policy, interest rate is regarded as a direct monetary instrument and required reserve ratio is as an indirect monetary instrument which in Iran, they are enforced by the monetary authorities to the banking system and will affect its behavior. In this paper, we study the balance sheet effects of the two policies using financial statements data of banking system, System of National Accounts and New Keynesian Stochastic Dynamic General Equilibrium model taking advantage of the statistics for the period 1981-2012. Calibration methodology is used to compute the parameters of DSGE model . We analysis Impulse Response functions and the first and second moments. Results show that an interest rate positive shock by one standard deviation causes the deposits and loans to be, respectively, about 8 and 25 percent higher than the steady state. On the other hand, a positive shock of required reserve ratio by one standard deviation has an impact opposite to the effect of an increase in banking interest rate on the balance sheet. Hence, the consequence of a positive interest rate shock is an increase in output and reduction in inflation and the consequence of shock relative to the required reserve ratio is a decrease in output and an increase in inflation.
Financial Economics
Mostafa Abdollahzadeh; Hashem Zare
Abstract
The main purpose of this paper is to calculate the entropy of money in the space of Gross domestic product with the approach of econophysics and investigating the effect of stock market development on it. In this regard, by using annual data in the period of 1370-1398 in the framework of Smooth Transition ...
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The main purpose of this paper is to calculate the entropy of money in the space of Gross domestic product with the approach of econophysics and investigating the effect of stock market development on it. In this regard, by using annual data in the period of 1370-1398 in the framework of Smooth Transition Autoregressive Model (STAR), the asymmetric behavior of monetary irregularities around a threshold at different levels of stock market value as a variable of analysis is investigated. The results show that at low levels of current value of the stock market (the first regime), net capital inventory and budget deficit of governments have positive effects and the number of companies admitted to the stock exchange organization have a negative effect on monetary entropy. At high levels of current value of the stock market (Second Regime), net capital inventory has negative effect and government budget deficit continued to have a positive effect on monetary entropy. Based on the results of this study, it is clear that the dynamics of the stock market will reduce monetary entropy, which is itself an indicator of wasting and lacking of access to the resources.
Sareh Hosseini; Hamid Amirnejad; Jafar Oladi
Abstract
National park is one of the world's natural ecosystems and the most vital environment for sustainable development of the environment and the ecological phenomenon whose valuation of their functions and services is one of the most effective factors in their stability. In order to achieve this goal, ecological ...
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National park is one of the world's natural ecosystems and the most vital environment for sustainable development of the environment and the ecological phenomenon whose valuation of their functions and services is one of the most effective factors in their stability. In order to achieve this goal, ecological and socioeconomic functions and services of Kiasar national park in northern Iran which include two forest and rangeland ecosystems using direct market methods, benefits transfer, cost-based methods and the replacement cost has been valued. In this research, the economic value of forest and rangeland ecosystem of Kiasar national park in 1393 was determined to be 2132.59 and 61.47 billion Rials, respectively. Based on the results, the total economic value of the services and functions of Kiasar national park is 883.2 billion Rials and the economic value per hectare is estimated at 388.59 million Rials. Also, three functions, water conservation, natural gas regulation and habitat have the highest share and two land and social functions have the lowest share of the economic value of the Kiasar national park. These results suggest that the national park Kiasar in terms of ecology more than the economic and social aspects.
Behavioral economics
Habib Morovat; Syrous Omidvar; Roya Eskandary
Abstract
Risk and uncertainty are key factors in making economic decisions. Since individual attitudes towards risk can greatly influence choices, it is crucial to understand the determinants of such preferences in order to predict and comprehend individuals’ behavior. The present study aimed to investigate ...
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Risk and uncertainty are key factors in making economic decisions. Since individual attitudes towards risk can greatly influence choices, it is crucial to understand the determinants of such preferences in order to predict and comprehend individuals’ behavior. The present study aimed to investigate the impact of several factors on individuals’ attitudes towards risk, specifically the degree of risk aversion, by examining individuals’ optimism and patience (time preference). The study used a questionnaire to collect data from a sample of 304 individuals in Iran selected through random sampling. The research method was a multivariate regression model. The findings indicated that both optimism and income have a significant negative effect on risk aversion, while age has a significant positive effect. Furthermore, the study found that patience does not have a significant impact on risk aversion.IntroductionRisk and uncertainty are critical factors that heavily influence most economic decisions, including investment, education, employment, and the decision to buy a house or insurance. Such decisions involve an element of risk, so they are highly influenced by individuals’ attitudes towards risk. In developing countries, such as Iran, most individuals typically experience unstable incomes, limited access to insurance, and possess few assets to cushion the impact of severe economic shocks. As a result, individuals in these circumstances are more exposed to risk, and these factors can significantly influence their attitudes towards risk. Understanding the determinants of these preferences is crucial to comprehending and predicting people’s behavior, as different attitudes towards risk lead to different choices. The present study was to examine how certain factors, such as optimism and patience (time preference rate), influence individuals’ attitudes towards risk. In addition, socio-economic variables were included as control variables to account for their potential impact.Materials and MethodsTo gather data on individuals’ degrees of risk aversion, optimism, and patience, this study used a questionnaire based on internationally recognized surveys. The model was then estimated by the general multivariate regression through the ordinary least squares (OLS) method.Results and DiscussionThe descriptive information related to demographic variables is presented in Table 1. Table 1: Frequency distribution of demographic sVariableVariable levelFrequencyRelative FrequencyGenderMale15549Female16051Total315100Marital statusSingle21970Married9630Total315100AgeLess than 20 years165Between 20-30 years17255Between 30-40 years10032Above 40 years278Total315100Level of educationHigh school41Diploma–BA9931BA–MA13944MA–PhD7323Total315100Employment statusUnemployed5116Retired10Housewife279School student72University student13142Employed9831Total315100The economic situationIncome below 1 million Tomans11236Income between 1–3 million Tomans10637Income between 3–6 million Tomans6320Income above 6 million Tomans3411Total315100Source: research findingsModel EstimationThe OLS method was used to estimate the model.Table 2. Model estimation resultsRA The dependent variableprobabilityt-statCoefficientsVariables0.00-3.71-0.027 * * *Optimism0.0023.070.0003 * * *Wealth0.000-63.60.29 * * *Income0.418-0.81-0.017Patience0.024-26.2-0.19 * *Gender0.0222.310.23 * *Single0.0005.630.044 * * *Age0.2151.240.06Education0.00075.52.16 * * *_Cons29.13F(8,295)304Number of obs0.000Prob > F0.44R-squared0.63Root MSE0.42Adj R-squared * The coefficient is significant at 10 % level, * * The coefficient is significant at 5 % level and *** The coefficient is significant at 1 % level.Source: research calculationsThe Brush-Pagan and VIF test show that there is no heteroskedasticity and collinearity at estimated residuals.As shown in the table, as the individual’s level of optimism increases, their degree of risk aversion decreases, which is consistent with previous research conducted by Felten and Gibson (2014) and Duhman et al. (2018). In addition, the study found that wealth has a direct and significant impact on risk aversion in Iran, which aligns with the findings of Agassi et al. (2015) and Qanbili (2016). However, this result contradicts the research conducted by Ronald and Grable (2010), and therefore, the effect of wealth on risk aversion warrants further discussion and reflection.Previous research suggests that there is a likelihood that the effect of wealth on risk aversion in Iran may be opposite to that observed in other countries. This could potentially be attributed to errors in measuring wealth In Iran, where information regarding individuals’ assets and wealth is often unclear. In this respect, the present study relied on indicators such as car and house ownership and their estimated values, which were self-reported by the participants and might be subject to bias.The study findings indicated that income has a significant and negative impact on risk aversion in Iran, which is aligned with previous research conducted by Wright (2012; 2014) and Shah et al. (2020). Moreover, it was found that gender has a significant effect on risk aversion, with females being more risk-averse than males. This finding is consistent with Banir and Newbert (2016), Hosseinnejad and Haddadi (2016), and Mohammadi-Majed (2018).The findings also revealed that age has a significantly positive impact on risk aversion in Iran, which is in line with the results of Dankers and Van Suest (1999) and Menadia et al. (2016). Finally, the results showed that time preference rate and education do not have a significant impact on risk aversion in Iran.ConclusionThis research examined the impact of several factors on individuals’ risk aversion in Iran. The investigation of the research hypotheses demonstrated that variables such as optimism and income have a significantly inverse relationship with risk aversion, with higher levels leading to decreased risk aversion. Wealth and age have a significantly positive impact on risk aversion, with higher levels leading to increased risk aversion. Furthermore, the variables of time preference rate and education were found to have no significant effect on risk aversion in Iran. The study also found that married individuals are more risk-averse than single ones, and females are more risk-averse than males.The results indicated that young people, males, and the individuals with higher incomes and lower wealth tend to accept risk more readily. The findings can provide fresh insight for investment consulting and insurance companies in Iran.
Monetary economy
Elham Kamal; Vahid Taghinezhadomran
Abstract
This paper studies the effect of central bank credibility (CBC) on interest rate from the perspective of fiscal and institutional factors, using a credibility loss index. As some central banks are not successful in channeling the actual inflation towards the announced targets, it seems necessary to investigate ...
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This paper studies the effect of central bank credibility (CBC) on interest rate from the perspective of fiscal and institutional factors, using a credibility loss index. As some central banks are not successful in channeling the actual inflation towards the announced targets, it seems necessary to investigate the impact of central bank credibility on the economic variables and also analyze the fiscal and institutional determinants of central bank credibility. Therefore, using a backward-looking indicator that measures the central bank's performance as the basis for obtaining credibility, this study analyzes the impact of CBC on the interest rate, assuming credibility is endogenous for 17 developing countries during the period 1996-2019. The result indicates that increasing the level of credibility loss positively affects the level of interest rate. In other words, increasing the central bank's credibility or improving its performance reduces the level of interest rate. Since performance is a function of external fiscal and institutional factors, improving the quality of democracy in society and legal implementation of fiscal rules along with the formal adoption of inflation targeting framework not only limits the behavior of governments and establishes financial discipline, but also improves the central bank performance. This will convince economic agents that governments and central banks are committed to their promises.1. IntroductionWhat determines the CBC? How CBC affects the interest rate? To address these questions, we use the backward looking measure of Neuenkirch and Tillmann (2014) which focuses on how the private sector pays attention to the past performance of the central bank when forming expectations. This measure, a credibility loss index, is defined as a gap between the average of past inflation and target inflation. This suggests that the higher the deviation from the target, the higher the credibility loss. To clarify the main drivers of the CBC, Levieuge et al. (2018) argue that there are fiscal and institutional factors, which ultimately affect the level of public’s expectations and attitude in the central bank’s ability to meet its commitment. Besides, Taghinezhadomran and Kamal (2021) investigate that central banks in the developing countries have not performed properly in the convergence of actual inflation towards the target range which could have ramifications on the macroeconomic levels and monetary variables such as interest rates. Accordingly, this paper studies the impact of credibility loss on the interest rate given the endogeneity of CBC for 17 developing countries from 1996 to 2019, using instrumental variables method. The results show that the higher the credibility loss the higher the interest rate. Additionally, establishment of budget-balance rule, the increasing the level of central bank independence and the number of veto players, and also the decreasing the level of central bank holdings of public debt are the main fiscal and institutional drivers of CBC. 2. Method and MaterialFollowing Neuenkirch and Tillmann (2014), we assume that the higher the credibility loss (inappropriate performance of the central bank) the higher the interest rate (Eq. 2). (1) (2)Where stands for the central bank independence index (the turnover rate). The turnover rate is counted by the number of central bank governor changes and denotes the number of veto players. Veto players are defined as individual and collective actors (individual politicians, political parties, and institutions), having the power to block a proposed change in current policies. Besides, their agreement is necessary before policies can be changed. sets the balance-budget rule. is central banks holdings of government debt. represents the nominal interest rate. and are the inflation gap and the credibility loss index, respectively. is the error term (iid). In this paper, we choose the fiscal and institutional variables as instrumental variables. The rationale behind that refers to the higher correlation between the fiscal and institutional variables and the credibility loss index and the lower correlation of fiscal and institutional variables with the dependent variable (interest rate). Since the endogeneity problem occurs when the independent variable is correlated with the error term in a regression model, we use the method of instrumental variables (2SLS) to examine the effect of credibility loss on the interest rate while determining the main influential fiscal and institutional factors. 3. Result and DiscussionThe results in the first stage show that all of the explanatory variables significantly affect the credibility loss index. Specifically, the higher the turnover rate the higher the loss in CBC. In other words, an increase in the turnover rate of the central banker have a negative effect on the performance of the monetary institution and shows the inability of the central bank to fulfill his/her promises. Our result shows that the increased number of veto players negatively affects the credibility loss. This suggests that the more veto players, the more difficult the overturn of central bank independence. The rise of the number of checks and balances could be as a good news to stimulate agents’ expectations as the change of decision to delegate becomes harder, giving to the private sector a greater scope to reduce the expected inflation. The negative effect of rule-based budget on the credibility loss indicates that rules constrain the behavior of governments and convince the public and markets that sovereigns and central banks are committed to the announced targets. The coefficient of sovereign debt holder is also statistically significant and positive. The results in the second stage show that inflation gap and credibility loss will increase the level of interest rate. This means that the higher the deviation from the inflation target the weaker the performance of central bank. In this case, the central bank is forced to increase the interest rate to response to this deviation.4. ConclusionUsing instrumental variables method and in two stages, this paper examined the effect of credibility loss on the interest rate while taking the endogeneity of CBC into account for 17 developing countries from 1996 to 2019. The positive impact of credibility loss on the interest rate suggests that the higher the deviation of the average of past inflation from the target, the higher loss in CBC today. This weak performance, will force the central bank to set a higher interest rate. The main reason behind that refers to the external factors such as fiscal and institutional factors, as our results suggest. In particular, the performance of the central bank is an outcome of fiscal and institutional factors, affecting the extent of interest rate. These findings indicate that simply adaption of inflation targeting framework does not improve the performance of the central bank. Rather, the legal implementation of fiscal rules, the lower fiscal dominance, and also the number of veto players could stabilize expectations and convince the public that governments and central banks are committed to their promises.
Esmail Ahmadi; Mohsen Zayanderoodi; Ali Raeispour; Alireza Shakibaee
Abstract
The purpose of this research is to investigate the efficiency of provincial tax affairs offices and their effect on tax revenues. To do this, depending on the type of variables used, DEA and BCC model, and the non-Controllable variables model (NCN) output-axis-return to variable scale (VRS) were used ...
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The purpose of this research is to investigate the efficiency of provincial tax affairs offices and their effect on tax revenues. To do this, depending on the type of variables used, DEA and BCC model, and the non-Controllable variables model (NCN) output-axis-return to variable scale (VRS) were used in the years 2010 and 2013. The research results show that only 7 tax administrations include tax offices in provinces Tehran, Boosher, Hormozgan, Sistan va Baloochestan, Markazi, Kerman and Khoozestan were efficient in these two years. This has made about 20% of tax revenue is not received due to inefficiency. The results also indicate that, although in the first three years of the fifth development plan, the value added of various sectors of the economy has increased nicely, but tax revenue growth has failed to move with these sectors. Therefore, if an appropriate mechanism for modeling the offices identified in this study as a reference can be created, it can also increase the efficiency of these departments at the level of the reference agencies, achievement of tax revenues and lower budget expenditures. Moreover, it is necessary to apply policies to increase the value added of various economic sectors as policies outside the control of the tax organization.
Public sector economics
Ali Nassiri Aghdam
Abstract
The paper aims to reassess “the Coase Theorem” in its historical context and highlight the discernible gap between the Coase Theorem and the often-overlooked arguments articulated by Coase. In “the Problem of Social Costs”, Ronald Coase intended to emphasis on the irrelevance ...
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The paper aims to reassess “the Coase Theorem” in its historical context and highlight the discernible gap between the Coase Theorem and the often-overlooked arguments articulated by Coase. In “the Problem of Social Costs”, Ronald Coase intended to emphasis on the irrelevance of Pigou's argument in dealing with externalities. The theorem implies that in a world with zero-transaction cost, external effects are internalized without government intervention and the allocation of legal rights does not matter. These implications have led observers to criticize the theorem, notwithstanding the accurate scrutiny reveals that almost all of the critiques center around the main assumption of the theorem – namely, zero transaction costs- rather than the theorem itself. While the correctness of the theorem heavily depends on the concept of “transaction costs”, the concept suffers from a lack of clear definition. It is important to note, in that paper, Coase intended to argue that Pigou's analysis in “the Economics of Welfare” is irrelevant, and in a zero-transaction cost world, market forces internalize externalities, and government intervention is not needed. In contrast, when positive transaction cost is considered the allocation of legal rights and liabilities becomes important. This latter point has been almost ignored in the literature and entailed that the Coase theorem is an unrealistic one. IntroductionCoase Theorem stands as a highly discussed and well-developed theorem in law and economics. The theorem received too much of critiques even before the publication of the Coase’s seminal paper. These hot debates made “the Problem of Social Costs” one of the most cited articles in Law and Economics. In this paper I am going to reconsider the theorem in its historical context and highlight the discernible gap between the Coase Theorem and the often-overlooked arguments articulated by Coase in the aforementioned article.Methods and MaterialTo conduct the research, I adopted the library and document research method. To do so, I thoroughly reviewed Coase’s methodological background and highlighted his consequentialist mind as well as his approach to externalities and rejection of Pigouvian liability and taxation rules. Furthermore, I analyzed critiques of the Coase Theorem and discussed why the theorem has remained robust against those attacks. Finally, I argued why the Coase theorem is a misunderstanding of Coase’s approach to real economy and should be interpreted as the departure point of his theoretical approach to real economy.Results and DiscussionAnalyzing nuisance and externalities, respectively in legal and economic literature was at the core of the Coase’s discussion in “the Problem of Social Costs”. At the time, the dominant legal approach to delineate liability was fault based. The Pigouvian solution to internalize externalities had been developed based on this legal tradition. Based on Pigou, taxes have to be employed to motivate polluters or injurers to take into account the costs they impose on others without compensating them.Coase, first of all, intended to undermine these legal and economic approaches to liability and nuisance. He developed, in that paper, his consequentialist approach to law, based on which alternative liability rules should be assessed in terms of their consequences, and the adopted rule should entail higher total net benefit. This was evident in his opening discussion in which he mentions the case of Sturges vs. Bridgman.In addition, he highlights the role of property rights in performing economies as well as the power of markets in exchanging legal rights and allocating them to the parties who value the rights higher than other parties. He made this clear when he assigned legal rights to farmer and herder alternatively and concluded that the resulting property right is efficient and invariant, regardless of the initial holder of the legal right. This argument named by George Stigler, The Coase Theorem.In this approach, not only markets are considered as a mechanism which is capable to allocate rights efficiently but also what are exchanged in markets are considered as bundles of rights rather than mere physical goods and services. He emphasized on this critical point at the concluding part of the paper.Among these and other exciting issues, what absorbed most attentions was the Coase Theorem and even most of the critics allocated their time and effort to undermine the Theorem, while the Theorem was only the departure point of his arguments. In the first half of the paper, maybe under the influence of the Black Stone Avenue’s discussions, he considered the case in which costs of using price mechanism is zero and argued that in such a world, market exchanges would internalize externalities, government intervention is not required, Pigouvian taxes are irrelevant, and the allocation of legal rights does not matter.In this paper, I discussed alternative critiques of the Coase Theorem and indicated that almost all of them, in fact, argue that in a non-zero transaction costs world the theorem does not hold. This is why these critiques are, in effect, the proof of the theorem rather than its refutation. As a matter of fact, the Coase Theorem is a development of the first fundamental theorem of welfare economics, and both of them are valid in a zero transaction costs world.ConclusionAs indicated, Coase’s main argument is different from the Coase Theorem. While the latter underscores the irrelevance of legal rules, the former highlights the importance of legal rules in real world, in which transaction costs are positive. In this world, reducing transaction costs by defining legal rights is efficiency enhancing (normative Coase Theorem). Furthermore, Legal rights should be chosen based on their merits in economizing exchanges and supporting arrangements with higher total net benefits. This is the main mission of the law and economics.
zahra Karimi Moughari; Mehrdad Maghsoodloo; Zahra(Mila) Elmi
Abstract
One of the most effective ways of realizing social equity is to provide equal opportunities for individuals to access education and to achieve educational equity. An important aspect of educational equity appears in the labor market and by the end of the education. The processes of finding a job ...
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One of the most effective ways of realizing social equity is to provide equal opportunities for individuals to access education and to achieve educational equity. An important aspect of educational equity appears in the labor market and by the end of the education. The processes of finding a job in the labor market and wage determination guide the efforts of individuals for gaining effective education. If the labor market does not send appropriate signals to the education system, the allocation of resources in the education system would not be correct. In this paper, the relationship between educational inequality and employment rates in Iranian provinces is examined by using Generalized Momentum Method (GMM) for a panel data of 28 provinces during 1380 - 1392. The employment rates and Gini coefficients of education are calculated from the income-expenditure data, published by the Statistical Centre of Iran. The results of this study show that average educational Gini coefficient, educational inequality, in deprived provinces is higher than rich provinces; and there is a negative and significant relationship between employment rate and educational inequality. In all provinces the employment rates has increased while the Gini coefficients has decreased.
international trading
Seyedeh Marveh Nasersadrabadi; Farhad Ghaffari; Teymour Mohammadi; Abbas Memarnejad
Abstract
The negative consequences of financial crises require the attention of economic policymakers and decision making centers.Therefore, considering the importance of the subject, the present study has investigated the effects of global financial crises on the trade patterns of Iran and its partners during ...
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The negative consequences of financial crises require the attention of economic policymakers and decision making centers.Therefore, considering the importance of the subject, the present study has investigated the effects of global financial crises on the trade patterns of Iran and its partners during the years 1995-2018.The variables have been estimated in the framework of the gravity model using the pseudo poisson maximum likelihood method.The findings show that the Asian financial crisis (1997) has an effective role in reducing the volume of trade but this result is the opposite in relation to the American financial crisis (2007); Because instead of a threat, it has become an opportunity for the movement of business flows. In this situation, it seems that the difference in the intensity and type of impact of financial crises on trade patterns can be affected by the nature of the crisis or the region where the crisis started.1.IntroductionCountries consistently grapple with economic and financial turmoil, which at specific junctures, can escalate into full-fledged financial crises (Moshiri & Nadali, 2013). These crises manifest as conditions where a significant number of financial institutions suddenly experience a substantial decline in the nominal value of their financial assets (Bonis et al., 1998). Given the historical recurrence of financial crises worldwide, it becomes imperative for economic policymakers and decision making centers to address and mitigate their adverse effects. This necessity stems from the detrimental impact that financial crises have on the real sector of economy (Kord-Zangeneh et al., 2019). Compounding the issue is the transnational nature of these crises, as they may transfer from one country to another. The transmission of financial crises occurs through various channels, including trade flows, foreign direct investment, commercial loans and financial aid (Massa & Velde, 2008). Among these channels, trade relations emerge as crucial communication pathways on a global scale, playing a pivotal role in influencing the performance of diverse economic sectors affected by financial crises.Hence, understanding international trade patterns holds greater significance than any other phenomenon in the economy, particularly in times of crisis. Furthermore, drawing insights from the experiences of other nations aids in understanding how trade flows unfold in countries that have recently weathered financial crises (Santana-Gallego & Perez-Rodriguez, 2018). Financial crises impact on the trade in two ways. First, they exert a negative influence on trade by disrupting the trade balance. Then crises transfer from one affected country to another through interconnected trade links. Consequently, the extent to which different countries engage with the global economy dictates the degree to which they are affected by the repercussions of a financial crisis.As countries are interlinked through trade flows, in the event of a shock impacting one economy, it has the potential to extend to the entire network, indirectly influencing trade relations between countries. This connection is particularly crucial because a financial crisis can transfer to other economic sectors through fluctuations in exchange rate variables, exports, imports and changes in international commodity prices (Brave & Butters, 2011).2.Materials and MethodsThe gravity model, proposed by Tinbergen (1966) to explain bilateral trade flows, is distinctive for its emphasis on reflecting international relations. In the field of international trade studies, traditional challenges arise in estimating the gravity model. Specifically, when employing the ordinary least squares method for estimating the gravity model, there is a tendency to exclude zero statistical observations. This limitation stems from the conventional method’s inability to compute a logarithm for the trade variable when trade between countries is not realized in certain years. Consequently, the omission of statistical observations in such instances renders it impossible to generate a zero logarithm. Moreover, when the model is estimated using the non-linear least squares method, there is a potential issue with the heterogeneity of variance, which can compromise the accuracy of interpretations based on the coefficients. Recognizing this challenge, Santos-Silva and Tenreyro (2006) introduced the Poisson pseudo maximum likelihood method to address the estimation of such models. A noteworthy aspect of this method is the non-elimination of zero statistical observations, ensuring unbiased and reliable estimation of variable coefficients. This is achieved by assigning equal weight to all statistical observations. Therefore, the method not only increases the number of statistical observations but also enhances the efficiency of the estimator.The main estimation approach revolves around the Poisson pseudo maximum likelihood method, as explained by theoretical foundations and existing literature that detail the connection between financial crises and international trade. This approach draws inspiration from the works of Santos-Silva and Tenreyro (2006) as well as of Santana-Gallego and Perez-Rodriguez (2018). In this respect, the research model was delineated following the model proposed by Glick and Rose (2016), as shown in Equation (1). (1) The present study aimed to investigate trade patterns by examining the volume of bilateral trade (total export and import) between Iran and its twenty trading partners. The analysis used annual data spanning from 1995 to 2018. The study developed the proposed model, leveraging the flexibility inherent in the gravity model as well as incorporating variables such as the logarithm of the Linder economic similarity index, the logarithm of Iran’s and its trading partners’ populations, the logarithm of the nominal exchange rate, the logarithm of geographical distance and financial crises. This comprehensive formulation is defined as the generalized gravity model expressed in Equation (2). (2) 3.Results and DiscussionDiagnostic tests are imperative before model estimation. Initially, the Chow test was employed to determine the suitable regression method. Subsequently, the Hausman test was used to decide between the methods of fixed effects or random effects.Table 1. Diagnostic testsResultProbabilityStatisticsTestNull Hypothesis Rejected0.00023.04ChowNull Hypothesis Rejected0.000437.51HausmanSource: Research findings The results outlined in Table 1 demonstrate the rejection of the null hypothesis in both the Chow and Hausman tests. To control the multilateral resistance to trade, the study estimated the coefficients of the variables by considering the country’s annual fixed effects. The process was conducted within the framework of the gravity model, employing the Poisson pseudo maximum likelihood method (see below).Table 2. Model estimation resultsProbabilityStandard deviationCoefficientsVariables***0.0000.000-0.179CRIijt 1997***0.0000.0000.135CRIijt 2007***0.0000.184-32.358LnLINijt***0.0005.9153.005LnPOPit***0.0000.1000.111LnPOPjt***0.0000.0000.017LnERijt***0.0000.000-0.400LnDISijt***0.0000.113-52.430CNumber of obs = 240R-Squared = 0.81Pseudo Log Likelihood = -171.405*** Indicates the significance of the coefficients at the level of 1 percent.Source: Research findingsThe results provided in Table 2 reveal that global financial crises exerted a significant impact on the trade volume, yet the nature of their influence on trade patterns varies. Specifically, the findings indicated that the Asian financial crisis of 1997 played a substantial role in reducing the trade volume, while the outcome was opposite in the case of the American financial crisis of 2007.The negative coefficient in the logarithm of the Linder economic similarity index indicates that the volume of trade increases as the per capita income difference decreases. Consequently, the countries with similar tastes or demand structures become the optimal markets for a country’s export goods.Conversely, the positive coefficient in the logarithm of the population of Iran and its trading partners signifies that an increase in population correlated with a rise in the trade volume. This association can be attributed to the utilization of a larger labor force, inherent in higher population figures, which positively affects the production of goods. The outcome is manifested in an increase in the trade volume.The positive coefficient in the logarithm of the nominal exchange rate indicates an increase in trade volume corresponding to an increase in this variable. This pattern emerges because foreign goods become more expensive compared to domestic ones. Consequently, both domestic and foreign consumers are inclined to substitute Iranian goods with foreign alternatives. Conversely, the negative coefficient in the logarithm of geographical distance reveals that this variable exerted a negative impact on the trade volume. In other words, the greater the distance between countries, the higher the transportation costs. As a result, distant markets become less attractive for establishing trade relations.4.ConclusionThe present study examined the effects of global financial crises on the trade patterns of Iran in relation its key trading partners. In this respect, the research used annual data from the studied countries during 1995–2018, then the coefficients of the variables were estimated within the framework of the gravity model as well as the Poisson pseudo maximum likelihood method.According to the findings, the examined countries experience the repercussions of financial crises, yet the magnitude and nature of their impact differ based on the specific characteristics of each crisis. In this context, the Asian financial crisis of 1997 played a significant role in reducing the trade volume in the countries under consideration, while the outcome was opposite in the case of the American financial crisis of 2007. Moreover, the positive coefficients of the variables specifically the logarithm of the Linder economic similarity index, the logarithm of the nominal exchange rate and the logarithm of the population of Iran and its trading partners underscore their favorable impact on the trade volume aligned with the increased trade flows in the countries. Given the negative coefficient in the logarithm of geographical distance, it is anticipated that trade with countries farther away from Iran will be comparatively lower. In fact, the majority of Iran’s trade relations are established with neighboring countries. In light of these findings, it is recommended to implement trade policies that support export-oriented domestic production in the country. This approach, in addition to generating foreign currency income, can serve as a mitigating factor against the adverse effects of financial crises.
Ali Asghar Banouei
Volume 3, 9(Autumn and Winter ) , October 2001, , Pages 89-126
Abstract
In this paper a brief review of Commodity Centred and Human Centred approaches is presented. The role of the existing accounting system and its related models in quantifying these approaches with respect to the following questions is analized: "To what extent can the existing ...
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In this paper a brief review of Commodity Centred and Human Centred approaches is presented. The role of the existing accounting system and its related models in quantifying these approaches with respect to the following questions is analized: "To what extent can the existing accounting system and the related General Equilibrium Models provide the basic statistical requirements of the Human Centred approach, and what role does Leontief's Accounting Method play in this regard?"To highlight these points, the argument is divided into two main sections: The first section briefly deals with analizing macro, Leontief and its extended models in the framework of the accounting system.In the second section, the Social Accounting Matrix and its extended accounting system which links the two approaches is introduced. The paper concludes that linking these approaches without Leontief intermediate matrix is quite impossible.
Fathollah Tari; Nasrin Arzroomchilar
Volume 4, Issue 11 , July 2002, , Pages 95-114
Abstract
Although most economists accept that education and investment in human resources are very effective in growth, the estimation of its impact on growth has many difficulties. Education spending has been used in this article to evaluate this correspondence. Simulation results show that formal education ...
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Although most economists accept that education and investment in human resources are very effective in growth, the estimation of its impact on growth has many difficulties. Education spending has been used in this article to evaluate this correspondence. Simulation results show that formal education spending will affect growth with a lag about 12 years. This is similar to finding of the studies for other countries.
Fatemeh Bazzazan; Parisa Mohammadi
Abstract
Iran is located on fault lines and due to abundant seismicity as well as being positioned on one of the world's seismic belts Lpa, it is very vulnerable to earthquakes. In addition, in spite of having one percent of the world's population, Iran suffers from more than six percent of all casualties from ...
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Iran is located on fault lines and due to abundant seismicity as well as being positioned on one of the world's seismic belts Lpa, it is very vulnerable to earthquakes. In addition, in spite of having one percent of the world's population, Iran suffers from more than six percent of all casualties from natural disasters in the world. Many major cities including Tehran are located on active faults. In the event of a potential earthquake Tehran's general urban weakness, high population density, and poor dispersion in neighborhoods can cause significant casualties and structural damage. Due to high level of trade with other provinces, the extent of damage would not be limited to Tehran and can cause considerable damage to the economy at a national scale. The main goal of this paper is to predict the regional economic loss from earthquake in Tehran and the rest of the country using a two-region input-output model. The main source of the data is a two-regional input-output table, which is constructed from 2011 national input-output table (Parliament Research Center) and regional accounts (Statistical Center of Iran), using FLQ non-survey based technique. The sectoral vulnerability under the five scenarios: none, little, moderate, major, and extensive are borrowed from Rahimi (2012). The results showed the economic impact of earthquake in Tehran on its GDP would be 81% in none, and up to 103% in the extensive scenario, while for rest of the country it would be 24% to 30% of national GDP.
