Macroeconomics
Maryam Mehrara; Amir Gholami; Seyed Mohammad Mehdi Ahmadi
Abstract
Due to the importance of balancing internal and external of the economy, research on the interaction effects of the budget deficit, savings gap, and current account deficit has always been a major issue for policymakers. The main purpose of this study was to test the validity of the triple deficit hypothesis ...
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Due to the importance of balancing internal and external of the economy, research on the interaction effects of the budget deficit, savings gap, and current account deficit has always been a major issue for policymakers. The main purpose of this study was to test the validity of the triple deficit hypothesis during the period 1978-2019 in the Iranian economy with the presence of the degree of trade openness for two models of oil trade and without oil trade. In the present paper, by providing a theoretical framework and using the Johansen - Juselius cointegration test method and the error correction mechanism, long-term and short-term relationships of the variables of this research are investigated. The results showed that the long-run relationship among the components of the triple deficit hypothesis is established in the two models of oil trade and without oil trade, but the validity of the triple deficit hypothesis is not confirmed in the short run. Through the Impulse response functions, decisions were made about the interrelationships among the variables, and the results of this method confirmed the validity of the triple deficit hypothesis for the oil trade model and the occurrence of the inverse mechanism for the oil-free trade model. Finally, in the oil trade model, internal and external imbalances reduced trade openness, and in the non-oil trade model, only the savings gap played such a role. This emphasized the key role of the private sector in reducing internal and external imbalances.
Zahra Azizi; Mehdi Pedram; pegah Azizi
Abstract
In recent years, extensive studies have been done on how trade openness affects economic growth; however, a limited number of studies focus on the volatility of economic growth. A group of these studies have identified openness as a factor in achieving more stable economic growth, and also a group of ...
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In recent years, extensive studies have been done on how trade openness affects economic growth; however, a limited number of studies focus on the volatility of economic growth. A group of these studies have identified openness as a factor in achieving more stable economic growth, and also a group of researches have considered it as a factor in creating instability in the economy, therefore, the empirical studies have ambiguous. An important reason for this ambiguity, can be the structure of trade and exports of countries. The export concentration will lead to a disruption of a large part of the country's production and foreign revenues, when there is an export shock. Therefore, in this article, in addition to studying the effect of trade openness on economic growth volatility, the role of export diversification in this connection is examined. To this end, data from the 18 selected developing countries have been used during the years 1980- 2015 in two panel data models. The first model, regardless of the diversification of exports, estimates this relationship, and the second model, enters the export diversification by multiplying it by openness. The results of the research indicate that the greater degree of trade openness, due to the transfer of external shocks to the economy, increases economic growth instability, but the diversification of exports can help to reduce the volatility of economic growth caused by trade.
Hasan Heidari; Soheila Parvin; Abbas Shakeri; Soleiman Feizy Iangajeh
Volume 14, Issue 43 , July 2010, , Pages 189-210
Abstract
Using a vector autoregressive (VAR) model and an impulse response analysis, this paper investigates the impact of trade openness on main macroeconomic variables including growth of output, inflation, and employment for the period 1961-2007 in Iran. More specifically, we intend to study how an increase ...
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Using a vector autoregressive (VAR) model and an impulse response analysis, this paper investigates the impact of trade openness on main macroeconomic variables including growth of output, inflation, and employment for the period 1961-2007 in Iran. More specifically, we intend to study how an increase in the degree of openness affects these main macroeconomic variables. The results of impulse response functions show that in the short run the trade openness increases the output growth but decreases the inflation rate. However, the short-run impact of openness on the growth of employment is negative. Moreover, the results show that a one unit change in the standard error of trade openness has no long-run effect on the output growth, the inflation and the growth of employment.
