zahra sadat raeisi gavgani; Teimour Mohammadi; farhad qhaffari; Abas Memar Nejhad
Abstract
The purpose of this paper is to investigate the existence of nonlinear effects of the fiscal policy. Specifically, the asymmetric effects of equal fiscal shocks (of government spending) on macroeconomic production variables are studied. In this regard, a Dynamic Stochastic General Equilibrium (DSGE) ...
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The purpose of this paper is to investigate the existence of nonlinear effects of the fiscal policy. Specifically, the asymmetric effects of equal fiscal shocks (of government spending) on macroeconomic production variables are studied. In this regard, a Dynamic Stochastic General Equilibrium (DSGE) model consistent with the conditions of the Iranian economy during the period 1369 – 1393 is used. We present theoretical foundations of the asymmetric effects of fiscal shocks on macroeconomic variables, then we refer to two strands of studies; the first one emphasizes nonlinearity in the effect of fiscal policy, and argues that nonlinear effects are associated with large and persistent fiscal impetus for industrial and developing countries. The second strand of studies emphasizes expectations about fiscal adjustment for debt sustainability during large fiscal adjustments rather than in normal times. The results show that the positive and negative impacts of government expenditures have asymmetric effects on macroeconomic variables. The effect of negative shock of government spending on consumption, investment and production of the private sector as well as total production is stronger, more stable, and larger. On the other hand the effect of positive government spending shock on these variables is smaller having more temporary impact.
Javad Torkamani; Elham Jamali Moghadam
Volume 7, Issue 25 , February 2006, , Pages 153-174
Abstract
This study attempts to investigate the effects of some government spending on poverty reduction in rural areas of Iran. Using time series data of 1971-2001, a system of equations including variables affecting poverty and productivity growth was considered. The system equations included poverty, total ...
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This study attempts to investigate the effects of some government spending on poverty reduction in rural areas of Iran. Using time series data of 1971-2001, a system of equations including variables affecting poverty and productivity growth was considered. The system equations included poverty, total factor productivity, nonagricultural employment, road, irrigation, power, wage and terms of trade. Using the simultaneity and diagonolity tests, the results showed three stage least square method is more suitable in this study. Marginal effects of government spending on poverty were calculated. Based on the results, government spending on rural and community development, roads agricultural research and development and irrigation, have the large impact on poverty reduction, respectively.
