Morteza Khorsandi; Karim Eslamloueyan; Hossein Zonnoor
Volume 17, Issue 51 , July 2012, , Pages 43-70
Abstract
The main goal of this paper is to derive an optimal rule for monetary policy in Iran. To do so, we estimate the monetary transmission equations and derive the optimal rule by using the dynamic programming method. Our dynamic optimization problem is to minimize the central bank's loss function subject ...
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The main goal of this paper is to derive an optimal rule for monetary policy in Iran. To do so, we estimate the monetary transmission equations and derive the optimal rule by using the dynamic programming method. Our dynamic optimization problem is to minimize the central bank's loss function subject to the transmission mechanism equations. We have modified our loss function to include inflation persistence as well. Using the growth rate in broad definition of money, M2 as our control variable, we estimate the transmission mechanism equations and derive the optimal monetary rule. Our findings indicate that the optimal monetary policy rule can decrease welfare losses and hence is a welfare improving policy. This means that the use of monetary rule is superior to discretionary policy in the case of Iran.
Reza Nasr Esfahani; Nematollah Akbari; Rasool Bidram
Volume 7, Issue 22 , April 2005, , Pages 43-68
Abstract
In this paper we examine the effects of nominal variables on the GDP gap in Iran. The potential GDP is obtained by Prescott filtering method.
A VAR model is set up & estimated for GDP gap, inflation, market exchange rate growth, and liquidity growth.
The results show that nominal variable ...
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In this paper we examine the effects of nominal variables on the GDP gap in Iran. The potential GDP is obtained by Prescott filtering method.
A VAR model is set up & estimated for GDP gap, inflation, market exchange rate growth, and liquidity growth.
The results show that nominal variable shocks influence the GDP gap in Iran in the same direction. Stability of these shocks indicates their long-run effect on the system. Thus, for economic growth, the economic policy must concentrate on production increases, which would affect the long run production.
Arian Daneshmand
Volume 18, Issue 57 , February 2014, , Pages 47-68
Abstract
Previous empirical studies have shown that left-wing governments are commonly expected to be associated with lower interest rates and higher tax rates on capital than their rightist counterparts. The importance of interest rates in shaping the variation in tax policies of OECD countries, where they have ...
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Previous empirical studies have shown that left-wing governments are commonly expected to be associated with lower interest rates and higher tax rates on capital than their rightist counterparts. The importance of interest rates in shaping the variation in tax policies of OECD countries, where they have been dominated by leftist governments, offers an interesting topic for research. Using data for up to 20 OECD countries in the period of 1966-2000, this paper tries to investigate a hypothesis that challenges the partisan theories of economic growth. We argue that the strategic nature of tax competition is not the sole factor in determining a country’s choice of taxation policy, and that other factors, notably interest rates, play an important role as well. We find that left-wing governments tend to lower capital taxes as a consequence of increased interest rates, which is consistent with the predictions of international tax competition theories, but in contrast to the partisan theories of economic growth presented in this paper.
Mohammadgholi Yousefi
Volume 18, Issue 55 , July 2013, , Pages 47-91
Abstract
The Purpose of this paper is a comparison among the Neoclassical, Institutional, and Austrian Schools of Thought on market mechanism. Searching through the major published works of distinguished representatives of these schools, we find that there are increasingly converging tendencies between ...
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The Purpose of this paper is a comparison among the Neoclassical, Institutional, and Austrian Schools of Thought on market mechanism. Searching through the major published works of distinguished representatives of these schools, we find that there are increasingly converging tendencies between Institutional and Austrian economics on market process. However, their positions in this regards are increasingly diverging from their neoclassical counterparts. Their differences with neoclassical are not only in terms of concepts and methods but also in their basic principles. The three schools of thought share ideas such as rejection of stationary equilibrium and emphasizing on the process of change. The passive and purposeless agent of neoclassical theory is replaced by acting, purposeful, and future-oriented social man following formal and informal institutions. Creating profitable opportunities and avoiding losses are concepts that have no meaning in neo classical economics of perfect competition, in which every market participants possess perfect or sufficient knowledge of all relevant circumstances. However, Institutional and Austrian scholars are of the view that these characteristics of the free market give rise to the importance of entrepreneur as a critical agent of change. In short, our study shows that institutional and Austrian schools of thoughts provide a much better and more realistic picture of market.
Ali Emami Meibodi; Ehsan Haghdoost; Javad Pakdin
Volume 16, Issue 46 , April 2011, , Pages 47-60
Abstract
Water scarcity in Iran has reached a level that calls for the attention of all stakeholders including water consumers. While the government as water distributor has made significant efforts in managing water on the supply side, an annual average rainfall of 251 mm limits the capacity of this supply-side ...
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Water scarcity in Iran has reached a level that calls for the attention of all stakeholders including water consumers. While the government as water distributor has made significant efforts in managing water on the supply side, an annual average rainfall of 251 mm limits the capacity of this supply-side approach. As a result, policy efforts have increasingly turned towards demand management approaches. The subjects of this research are the determination of existence value of drinking water for the households in Larestan, and a measure of an individual’s willingness to pay (WTP) based on Contingent Valuation Method (CVM) and dichotomous choice (DC). The logit model was used for measuring the individuals' WTP. Estimation parameters of the model are based on the method of maximum likelihood (ML). We used data from 320 randomly selected households in Larestan, Iran. Our findings show that once drinking tap water is connected, the households are willing to pay an average of US$0.24 (per cubic meter) in addition to their monthly charge for the water consumed.
Parviz Davoodi; Zahra Zarepour
Volume 8, Issue 29 , February 2007, , Pages 47-74
Abstract
Demand for money and its stability are important in an economy especially in the design of monetary policy. Money consists of different components and its definition would depend on types of components included. It has been argued that the simple sum indices as the definition of money are inconsistent ...
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Demand for money and its stability are important in an economy especially in the design of monetary policy. Money consists of different components and its definition would depend on types of components included. It has been argued that the simple sum indices as the definition of money are inconsistent with microeconomic theory. By using the simple sum method for aggregation, it is implicitly assumed that there is a perfect substitution among the various money components. An alternative definition of money uses the index number theory to construct indices which allow different substitution rates among the components of money. In this paper, we estimate the Iranian demand for money for the period 1367:1 to 1383:1 (1988-2004) using Divisia index for definition of money.
The results show that the estimated demand for money in Iran is stable. However, the adjustment rate in the models using Divisia index is higher than that when the simple sum index is used. Our results are consistent with the other studies that indicate a rapid adjustment in the Iranian money market.
Saeed Moshiri; Habib Morovat
Volume 7, Issue 25 , February 2006, , Pages 47-64
Abstract
The very complex movements in the stock prices are usually taken as random or stochastic, but they may be produced by a deterministic data generating process. Chaos refers to the nonlinear dynamic deterministic process that generates a series, which appears like random, but has a long memory. In the ...
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The very complex movements in the stock prices are usually taken as random or stochastic, but they may be produced by a deterministic data generating process. Chaos refers to the nonlinear dynamic deterministic process that generates a series, which appears like random, but has a long memory. In the Economics and Finance literature, stock prices are known to be random due to their complexities, and therefore being unpredictable. In this paper, we test for chaos in the stock prices using the data from the daily and weekly stock prices listed in the Tehran Exchange Market (TEPIX) in 1377-1382 (1998-2003). We apply three tests for chaos, namely; BDS, Lyaponov Exponent, and Neural Networks; to the residuals of linear (ARIMA) and nonlinear (GARCH) models. The BDS and the Neural Networks tests results show that there exists nonlinearity in the ARIMA residuals, but not in the GARCH residuals. However, the Lyaponove exponent test result is positive for all different dimensions indicating that the TEPIX is chaotic.
Jamshid Pazhoyan; Hosseini Seyyed Shams-Aldin
Volume 5, Issue 16 , October 2003, , Pages 47-67
Abstract
The present paper applied Cointegration Vector Autoregressive (CVAR) Technique to Stone-Geary’s linear expenditure system، in order to estimate the residential demand for water in Metropolitan Tehran.Data used are for 1982-2000 period. Price-elasticity of the demand function is estimated ...
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The present paper applied Cointegration Vector Autoregressive (CVAR) Technique to Stone-Geary’s linear expenditure system، in order to estimate the residential demand for water in Metropolitan Tehran.Data used are for 1982-2000 period. Price-elasticity of the demand function is estimated as 8% for the point elasticity، and 12% for the average of duration. The income elastisities are estimated as 13% and 20%، respectively.This shows that the price elasticity of demand for water is inelastic. It is also indicated that the minimum use of water by Tehrani Citizens is 92 liters per-person per-day which is in the range of standard water use.
Firooz Falahi; Majid Feshari; Siab Mamipour
Volume 15, Issue 45 , February 2011, , Pages 49-75
Abstract
This paper focuses on the relationship among structure, conduct, and performance (SCP) for a sample of 141 four-digit industries during 1999-2005 in Iran. For this purpose seemingly unrelated regression estimation (SURE) method is used to estimate the parameters of the models for profitability (the ratio ...
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This paper focuses on the relationship among structure, conduct, and performance (SCP) for a sample of 141 four-digit industries during 1999-2005 in Iran. For this purpose seemingly unrelated regression estimation (SURE) method is used to estimate the parameters of the models for profitability (the ratio of profit to sale), concentration (the inverse of the number of firms in industry), and advertising.
Results show that profitability is determined by advertising, which in turn, is affected by profitability. In addition, there are positive relationships among advertising, research and development expenditure, concentration, growth rate of industries’ sale, ratio of investment to sale, and profitability.
Omid Ranjbar; Zahra (Mila) Elmi
Volume 11, Issue 35 , July 2008, , Pages 51-78
Abstract
In this paper, we study per capita GDP convergence in D8 countries. We test for convergence hypothesis using two approaches: Time series model (Augmented Dickey Fuller Test), and distribution model (Theil Inequality index and cross sectional variance). The time series model estimation results show that ...
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In this paper, we study per capita GDP convergence in D8 countries. We test for convergence hypothesis using two approaches: Time series model (Augmented Dickey Fuller Test), and distribution model (Theil Inequality index and cross sectional variance). The time series model estimation results show that Indonesia, Malaysia, and Turkey converge toward the US. The result of convergence hypothesis test between Iran and other D8 countries shows that convergence has occurred between Iran ,Pakistan and Nigeria. Also, stochastic divergence has occurred between Iran, Pakistan, and Bangladesh. The results of distributive models show that the Inequality has been increasing among D8 countries since 1990.
Mansour Zarra Nezhad
Volume 6, Issue 21 , February 2005, , Pages 51-66
Abstract
Before the appearance of Islam, Dinar and Derham were the currencies of Byzantine and Iran, recpectively. These two currencies were current in pre-Islamic Arabia and continued to be the currencies of primary Islamic states. In 74 (AH) Islamic Dinar and Derham were coined. Estimating the value of Dinar ...
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Before the appearance of Islam, Dinar and Derham were the currencies of Byzantine and Iran, recpectively. These two currencies were current in pre-Islamic Arabia and continued to be the currencies of primary Islamic states. In 74 (AH) Islamic Dinar and Derham were coined. Estimating the value of Dinar and Derham is a matter of considerable importance to those doing research in Islamic Economics. The present article tends to estimate the value of these two currencies using two methods of purchasing power and natural value. The findings from the research show that each Dinar worths 293 to 350 thousand rials.
Ali Asghar Salem
Abstract
In this study, in order to estimate the Engel curve and income elasticity of Information and communications technology (ICT) for residential urban households in Iran, the Working-Leser equations system functional form has been used considering economic and social characteristics of the households. This ...
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In this study, in order to estimate the Engel curve and income elasticity of Information and communications technology (ICT) for residential urban households in Iran, the Working-Leser equations system functional form has been used considering economic and social characteristics of the households. This model is estimated using Seemingly Unrelated Regressions (SUR) analysis and cross section data on nearly 19 thousands urban households for the year 2015. The results show that income elasticity of ICT for low, middle, and high-income households is 1.22, 1.12 and 0.8 respectively. These results show that ICT is a luxury good for the whole society. However, this commodity group is considered as a necessary good for the wealthy households. Also increasing the level of education leads to an increase in using of information and communication technology products. One percent increase in the years of education, leads to 0.06 percent increase in demand of information and communication technology products.
Naser Khiabani; Maryam Sarooghi
Volume 16, Issue 47 , July 2011, , Pages 53-73
Abstract
This paper studies four ARCH type models including ARCH, GARCH, EGARCH and TGARCH at Value at Risk (VaR) estimation. The four models were applied to daily Tehran stock market data to assess each model in estimating one day Value at Risk at various confidence intervals. Our findings suggest that for the ...
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This paper studies four ARCH type models including ARCH, GARCH, EGARCH and TGARCH at Value at Risk (VaR) estimation. The four models were applied to daily Tehran stock market data to assess each model in estimating one day Value at Risk at various confidence intervals. Our findings suggest that for the daily return of Tehran Stock market, which exhibit fat-tailed and leptokurtic features, the VaR estimates generated by the GARCH-T models have good accuracy at high confidence levels.
Ali Asghar Banooi; Mohammad Jolodari Mamaghani; Seyed Iman Azad
Volume 13, Issue 41 , February 2010, , Pages 53-77
Abstract
Using Conventional methods of Chenery-Watanabe and Rasmussen in inter industry linkages hae three limitations: Supply and demand sectors cannot be distinguished, distinction between balanced and unbalanced growth strategies are not clear and the measurement of inter industry linkages mainly depends on ...
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Using Conventional methods of Chenery-Watanabe and Rasmussen in inter industry linkages hae three limitations: Supply and demand sectors cannot be distinguished, distinction between balanced and unbalanced growth strategies are not clear and the measurement of inter industry linkages mainly depends on the size of sectoral intermediate demands. In this paper, we introduce an eigenvector method to overcome those limitations. We use the 22 aggregated sectors of the 1380 (2000) survey-based Input-Output table. The overall results show high correlation coefficients between the conventional methods. Furthermore,, we find that the eigenvector method is able to better identify those sectors which remains in the production process and therefore the key sectors.
Ali Taiebni; Rezvan Zandyeh
Volume 13, Issue 38 , April 2009, , Pages 53-96
Abstract
Some studies show that in recent years, despite of increase in commodity prices such as oil and steel and conducting loose monetary policy in most countries, global price levels have low and stable rates of growth and inflation rates are well below the forecasts in Iran, in spite of adopting ...
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Some studies show that in recent years, despite of increase in commodity prices such as oil and steel and conducting loose monetary policy in most countries, global price levels have low and stable rates of growth and inflation rates are well below the forecasts in Iran, in spite of adopting extremely expansionary policies, inflation rate has experienced a relatively stable trend in recent years. This may be due to globalization. This study aims at explaining theoretical bases of globalization effects on inflation and then evaluating it in Iran. In this study a VAR model has been used to test globalization effect on inflation, which mostly presents short-run dynamics of inflation. Results are as follow: 1- The more Iranian economy opens to trade the less domestic business cycles affect inflation and it will have a smoother path. 2-An increase in import price acts as a supply shock in the economy and increases inflation.3- Iran's trade partner's booms and slumps transmit to Iran through trade and affect domestic inflation.
Ali Asghar Banooi; Mojtaba Mohagheghi
Volume 9, Issue 33 , February 2008, , Pages 53-73
Mohammad Ali Kafaei,; Dorostkar Ezzatolah
Volume 9, Issue 30 , April 2007, , Pages 53-76
Abstract
Income distribution is usually affected by social and economic structures and especially by factors such as inflation, unemployment rates and the government size. In addition, the level of literacy and education are also seen as important factors affecting the income gap among different groups. The ...
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Income distribution is usually affected by social and economic structures and especially by factors such as inflation, unemployment rates and the government size. In addition, the level of literacy and education are also seen as important factors affecting the income gap among different groups. The purpose of this article is to study the relationship between educational variables, measured by the literacy level and its dispersion, and income distribution in the Iranian economy for the period 1347-1380 (1968-2001). Our findings indicate that as the average level of education increases, income inequality will decrease; but with increasing the standard deviation of education among citizens, income equality worsens.
Mahmood Khataei; Roya Seifipoor
Volume 7, Issue 24 , October 2005, , Pages 53-76
Abstract
In Iran, financial market is heavily dominated by the government. The big share of market is owned and run by government, particularly in banking sector. In effect the range of interest rates for different deposits and loans in banks are fixed by Islamic Republic of Iran Central Bank (IRICB). Since the ...
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In Iran, financial market is heavily dominated by the government. The big share of market is owned and run by government, particularly in banking sector. In effect the range of interest rates for different deposits and loans in banks are fixed by Islamic Republic of Iran Central Bank (IRICB). Since the rates are well below the equilibrium levels, selective credit policies are common components of financial restriction in Iran. In other words credit rationing is implemented in official market. Under such circumstances, a black marker for deposits & loans is formed. It operates with very higher interest rates, but very efficient with respect to decision making process. The two official and non- official (black market) markets form the two – sector financial system of Iran. Each sector is managed with different rules and policies. As a result some well known rules in monetary policy do not work in the expected way in Iran. In particular decreasing interest rate policy in official market does not boost the demand through investment. We show theoretically the subject by a modified version of Loanable Funds Theory for a two – sector financial market. Moreover an estimated Iran investment function confirms empirically the theoretical approach. Engle – Granger Test confirms the results too. Also financial repression in Iran causes some transfer payments by deposit owners to those receive loans in official market which could be as high as over %10 of GDP. The policy implication to be adopted by policy makers is a well known deregulation policy which results in integration of the two markets.
Seyyed Safdar Hosseini; Mohammad Reza Pakravan Charvadeh; Habibollah Salami
Abstract
One of the main approaches to achieve food security is redistribution measures such as the subsidy reform program with the aim of social justice and improved welfare of low-income groups. In this study, we analyzed the effect of the implementation of targeted subsidies program on food security in Iran ...
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One of the main approaches to achieve food security is redistribution measures such as the subsidy reform program with the aim of social justice and improved welfare of low-income groups. In this study, we analyzed the effect of the implementation of targeted subsidies program on food security in Iran during 2005-2012. A model of food security was estimated after calculating the adult’s energy intake through household’s consumption information. We found an inverse relationship between the subsidy reform program and food security among Iranian households. Due to this program, food prices increased and households’ real income decreased. The results of these changes are the increased cost of living and decreased share of income spent on food.
Somayeh Shahhosseini; Javid Bahrami
Volume 17, Issue 53 , February 2013, , Pages 55-83
Abstract
Owing to importance of monetary and financial aspects of macroeconomic fluctuations, and the role of financial intermediaries, in this paper, we design a new Keynesian Dynamic Stochastic General Equilibrium (DSGE) model with regard to banking, to analyze the effect of oil, productivity and monetary ...
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Owing to importance of monetary and financial aspects of macroeconomic fluctuations, and the role of financial intermediaries, in this paper, we design a new Keynesian Dynamic Stochastic General Equilibrium (DSGE) model with regard to banking, to analyze the effect of oil, productivity and monetary shocks on Iran's economy. The effects of those shocks on different variables of the model appear to be consistent with our theoretical expectations and Iran's economy. In fact, inclusion of the banking sector in the model contributes positively to better explanation of Iran's business cycle features. By applying the model, we find that outstanding claims of banking sector reduce the impact of monetary shocks. Therefore, outstanding claims of banking sector is likely to weaken the efficiency of discretionary monetary policy against macroeconomic fluctuations.
zahra dehghan shabani
Volume 18, Issue 54 , April 2013, , Pages 55-92
Abstract
This research aims to analyze the effects of population density on industrial concentration and regional economic growth in the Iranian provinces. For this aim, this study is divided into theoretical and applied sectors. From theoretical point of views, the research has proposed a simple theoretical ...
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This research aims to analyze the effects of population density on industrial concentration and regional economic growth in the Iranian provinces. For this aim, this study is divided into theoretical and applied sectors. From theoretical point of views, the research has proposed a simple theoretical framework to study of the impacts of population density on industrial concentration and regional economic growth. In applied sector, we have specified econometric models and estimated them by using system dynamic panel-data for 28 provinces of Iran over the period 2000-2010. The empirical results of econometric models have shown that population density has a positive effect on industrial concentration and regional economic growth in the Iranian provinces.
Nahid Pourrostami
Volume 16, Issue 48 , October 2011, , Pages 55-85
Abstract
Monetary and banking crisis and their heavy costs during the last three decades resulted in increasing attention to the role of institutional environment, public policy as well as regulatory governance. New research works are done to define indicators to evaluate supervisory rules and regulations in ...
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Monetary and banking crisis and their heavy costs during the last three decades resulted in increasing attention to the role of institutional environment, public policy as well as regulatory governance. New research works are done to define indicators to evaluate supervisory rules and regulations in financial markets. The Basel Committee on Banking Supervision- a group of representatives of bank supervisors from advanced countries-issued the Core Principles in 1997 to standardize financial market for Effective Banking Supervision. These principles are accepted by many countries in the world. In this research, we first, investigated the role of institutional environment in banking sector development encompassing 53 countries from 2000 to 2008. The results indicate that well-developed legal (public) institutions have significant effect on banking sector credit expansion. Second, we constructed regulatory indicators based on the assessment of The Basel Committee regarding accountability and independence arrangements for those 53 countries, for which the required data was available. Then, we studied the effect of those indicators on credit expansion in banking system. The results have shown the lack of a significant relationship between banking credit development and the rate of accountability and independence arrangements (as suggested by Basel Committee assessments). Although, these results confirm Ranjit Lall's findings (2009), more information is needed- at least for two periods.
Alireza Amini; Hasty Rismanchy; Alireza Farhadi Kia
Volume 14, Issue 43 , July 2010, , Pages 55-80
Abstract
In this study, the factors affecting total factor productivity (TFP) are estimated with an emphasis on foreign direct investment (FDI) in Iran and 23 selected countries using the data over the period 1996-2006. TFP is computed using the Divisia index technique. The findings of this study show that the ...
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In this study, the factors affecting total factor productivity (TFP) are estimated with an emphasis on foreign direct investment (FDI) in Iran and 23 selected countries using the data over the period 1996-2006. TFP is computed using the Divisia index technique. The findings of this study show that the main determinants of TFP comprise FDI capital stock, R&D capital stock, university enrolment gross rate (as a proxy for human capital), the degree of openness (as the main sources of technological progress) and the ratio of actual output to potential output (as a measure of capacity utilization rate).. However, the magnitudes of the estimated parameters confirm that capacity utilization rate has the highest effect while FDI capital stock has the lowest effect on TFP.
Mansor Zibaei; Ashan Shooshtarian
Volume 9, Issue 32 , October 2007, , Pages 55-83
Abstract
Anti poverty program in Iran has started in 2001 to mitigate poverty. This paper addresses issues related to the dynamics of poverty using household panel data for urban and rural areas of Iran covering the period 2001-2003. For this purpose، poor and non poor households have been identified by estimating ...
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Anti poverty program in Iran has started in 2001 to mitigate poverty. This paper addresses issues related to the dynamics of poverty using household panel data for urban and rural areas of Iran covering the period 2001-2003. For this purpose، poor and non poor households have been identified by estimating rural and urban poverty lines. The persistence of poverty during this period has been investigated applying spell approach. Also, determinants of reentering and exiting poverty rate have been studied using the logit model. Food Energy Intake (FEI) method and nonparametric regression have been used to estimate food and non food poverty lines. Results indicate that poverty is more widespread in rural areas than in urban areas and is more persistent in urban areas than rural areas. Also، study shows that chronic poverty is more common in urban areas.
Hossein Abbasi Nejad; Hossein Kavand
Volume 9, Issue 31 , July 2007, , Pages 55-75
Abstract
Existence of unit root in logarithm of real GDP can be a sign of random walk with drift process in potential output. In this respect, the time growth rate of the potential output can be estimated as a proxy for productivity in state- space form. For this purpose, at first potential output and GDP gap ...
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Existence of unit root in logarithm of real GDP can be a sign of random walk with drift process in potential output. In this respect, the time growth rate of the potential output can be estimated as a proxy for productivity in state- space form. For this purpose, at first potential output and GDP gap have been simultaneously estimated with Kalman Filter algorithm. Then, the results of the potential output and production cycle have been compared with the results of Hodrick- Prescott and Baxter-King approaches. The three methods have confirmed the increase in the economic stability in recent years. To take into account the oil price shock effects on government income, we incorporate the productivity into the model as a random walk process. This makes it possible to estimate productivity time services for the period 1367 (1988):Q1-1384 (2005):Q4. Our findings show that productivity in recent years has enjoyed a slow but positive trend and is somewhat stable.
