International economy
Reza Ashraf Ganjoui; Saeed Iranmanesh
Abstract
In recent decades, international sanctions have become a recurring feature in political interactions between some governments. The United States has imposed the most economic sanctions since World War II. Also, several actions have been taken by the United Nations in recent years. In this study, the ...
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In recent decades, international sanctions have become a recurring feature in political interactions between some governments. The United States has imposed the most economic sanctions since World War II. Also, several actions have been taken by the United Nations in recent years. In this study, the effect of economic sanctions of the United Nations and the United States on the misery index during the years 1991-2020 has been investigated by using the generalized least squares (GLS) method. The results indicate that the United Nations and United States sanctions have a significant effect on the misery index. On average, the imposition of sanctions by the United Nations and the United States have increased the misery index of the target country by 8.12 and 6.49, respectively. Also, the positive and increasing effect caused by the application of comprehensive economic sanctions of the United Nations on the misery index is more than the sanctions of the United States. IntroductionBefore the First World War, the countries with high military and economic power used the only means available to implement their desired policies in the target countries through war. However, since 1914 during the First World War and more widely since 1990, the military powers replaced the lever of war with economic and political sanctions to advance their goals in different countries (Medlicot, 1952). In recent decades, international sanctions have become a recurring feature in political relations between some states. Difficulties caused by embargo can take different forms. Experts consider sanctions as economic tools that affect the economic interests of countries. According to what has been said, the innovation of this article is to examine the impact of economic sanctions of the United Nations and the United States on the misery index of the target countries, including Iran. Methodology and MethodsThe current research is an applied research in terms of its purpose. In this study, documentary methods will be used to identify variables and collect information, and statistical and econometric methods will be used for its analysis. The statistics and information needed for the research were extracted from the information available on the official website of the World Bank, the Federal Reserve Bank, the websites of the United States Congress and the United Nations website. In the present study, to evaluate the effects of the economic sanctions of the United Nations and the United States on the misery index of the sanctioned countries, the following model is estimated following the studies of Karimi et al. Where Yi,t is the dependent variable, 𝑋i,t represents a vector of control variables including liquidity (broad money) (LIQ), capital stock (K), gross domestic product at constant US dollar prices (2010=100) (GDP) and the degree of trade openness (𝑇𝑂) is imports and exports divided by GDP , UNi,t is the independent variable of United Nations sanctions, USi,t is the independent variable of United States sanctions, 𝛼i is the intercept, δt is the time effects on the constant term, is the error term of the model. ConclusionThe results of the estimation showed that the effect of United Nations and United States sanctions on the misery index was positive and significant. UN sanctions with a coefficient of 8.12 and sanctions of the United States with a coefficient of 6.49 have been effective on the misery index. Also, according to the results of the study, proper liquidity management, reducing the economy's dependence on certain product income, reviewing business relations and moving and replacing business partners are among the solutions that can play an effective role in reducing the negative consequences of sanctions for the target countries. To solve each of the two problems of inflation and stagnation, special policies are used, and generally, the monetary policies used for inflationary conditions are opposite to the policies that can be used for stagnation, in such a way that in economic theories, in inflationary conditions, monetary contractionary policies are used in recessionary conditions. Monetary expansion and fiscal expansion policy are suggested. But in a situation where the increase in the misery index is caused by the simultaneous increase in inflation and unemployment, it is very difficult to choose and apply the right policy in such a way that the implementation of a monetary contraction policy will lead to stagnation and an expansionary monetary policy will also lead to inflation. Economic management has special requirements in the context of the intensification of sanctions.
International economy
Seyed Hasan Malekhosseini; Seyed Komail Tayebi; Monireh Rafat; Mahdi Yazdani
Abstract
Estimating the real exchange rate misalignment from the equilibrium value and exploring the factors affecting its changes is crucial for both economic policymakers and economic agents. Among the various factors affecting exchange rate misalignment, the exchange rate regime, has received less attention ...
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Estimating the real exchange rate misalignment from the equilibrium value and exploring the factors affecting its changes is crucial for both economic policymakers and economic agents. Among the various factors affecting exchange rate misalignment, the exchange rate regime, has received less attention in experimental studies. Accordingly, the present paper seeks to find out the answer to the question of how real exchange rate misalignment is affected by different exchange rate regimes. In other words, in which of the exchange rate regimes is the exchange rate misalignment less and in which one it is higher? To answer the question, the propensity score matching approach has been used. For this purpose, we have used data from 116 developing countries with different exchange rate regimes in 2019. Other factors such as real exchange rate misalignment in the previous period, inflation, the quality of institutions and financial development have been considered as match variables to net the effect of the exchange rate regime on real exchange rate misalignment and to separate the effects of other variables. The results showed that the real exchange rate misalignment from its equilibrium level has responded significantly to the type of exchange rate regime adopted by the countries, so that the floating exchange rate regime increases the real exchange rate misalignment in the selected developing countries wherever implemented. It can be argued that factors such as high exchange rate fluctuations, a more drastic adjustment in the price level, and speculative bubbles or contagion effects in the floating exchange rate regime have led to an increase in these misalignments.
International economy
Fakhri Mirshojaee; Nasser Elahi; Mohsen Seighali
Abstract
An important subject in the field of global economy is the financial crisis contagion on various markets. Given the expansion of trade relationships among different countries, proving the existence of contagion will facilitate policymaking in times of crisis. The present article tries to find the answer ...
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An important subject in the field of global economy is the financial crisis contagion on various markets. Given the expansion of trade relationships among different countries, proving the existence of contagion will facilitate policymaking in times of crisis. The present article tries to find the answer to the question of whether the Iranian foreign exchange market is affected by certain global crises. The answer may initially seem to be obvious; nevertheless, the channels of contagion or its share in market fluctuations cannot be confirmed if the existence of the phenomenon is not proved at first place. This study reviews the contagion effects of financial crises in selected crisis-stricken countries and those of oil and gold markets on Iran's free foreign exchange market, covering four crises including the US stock market crash, the Mexican financial crisis, SAARC, and the US subprime mortgage crisis during 1987-2008. For each crisis, stability periods were identified and using daily data and the Copula-GARCH model, the existence of contagion effects was studied. Findings indicated the contagion effects of the crises in the mentioned markets on the foreign exchange market. This was specifically witnessed in the case of the 2008 crisis with effects larger than others, manifesting themselves in the foreign exchange as well as the oil and gold markets. Therefore, part of the fluctuations in the market may be attributed to external factors, requiring the policymaker to avoid any intervention during global financial crisis or turbulence in the oil and gold markets.
International economy
Farhad Khodadad Kashi; Soheila Mirzababazadeh; Somayeh Shahhoseini; Siyavash Jani
Abstract
The experience of some countries indicates that export has been an important factor in economic growth and its sustainability. Cost advantage, knowledge and innovation are the factors that affect export. Cost advantage in turn depends on various factors such as learning by doing. Learning leads to the ...
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The experience of some countries indicates that export has been an important factor in economic growth and its sustainability. Cost advantage, knowledge and innovation are the factors that affect export. Cost advantage in turn depends on various factors such as learning by doing. Learning leads to the expansion of international trade and economic growth by reducing production costs and creating a competitive advantage. The main purpose of this paper is to evaluate learning by doing and investigating its impact on industrial exports at four-digit ISIC codes level during 2011 to 2015. For this purpose, three different indicators have been operationalized to quantify learning and three export supply models have been estimated using panel data technique. Obtained results indicate that in all three models, learning by doing has a positive and significant effect on export supply. In other words, the effect of learning on exports is not sensitive to the way of offering operational definition. Also, the variables of trade openness, research and development costs and human capital all have positive and significant effects on the export of four-digit ISIC code industries.
International economy
Mahdi Yazdani; Fahimeh Mohebinia
Abstract
In the present study, the competitiveness of Iran's agricultural, industrial and in global markets services sectors has been investigated and analyzed. This measurement was taken by calculating four indicators of relative comparative advantage (RCA) at the level of two- and four-digit codes of ...
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In the present study, the competitiveness of Iran's agricultural, industrial and in global markets services sectors has been investigated and analyzed. This measurement was taken by calculating four indicators of relative comparative advantage (RCA) at the level of two- and four-digit codes of the International Industrial Standard Classification System for Economic Activities (ISIC) and using the data of Iran-world input-output tables during the period 1996-1995. The results show that out of 3 main subgroups of agriculture, only subdivisions of agricultural products, horticulture, livestock and poultry and hunting and other related activities, and out of 19 subdivisions of industry, only subdivisions of mineral extraction and other related materials, have RCA in all studied years. Other subsections have fluctuations in the presence or absence of comparative advantage, and some have a distinct RCA pattern. This situation has existed in 10 service sub-sectors of the country, but in general, the relative export advantage for service sub-sectors has not been identified in the whole period. In addition, the results of RCA index compatibility tests by performing 3 Cardinal, Ordinal and Dichotomous Measures show that the results of Ordinal tests are more satisfactory than the results of Dichotomous and Cardinal tests and therefore, the present study provides an Ordinal interpretation of RCA indicators in the formation of economic policies. Finally, the results of stability tests show that the indicators of comparative export advantage did not have a stable trend during the period.
International economy
Leila Allahdadian; Seyed Komail Tayebi; Gholamhosein Kiani
Abstract
According to the Heckscher-Ohlin-Vanek (HOV) theory, besides labor force and capital other production factors such as energy and indicators of environment quality may affect exporting potentials of goods and services in an economy. Accordingly, the objective of this paper is to explore the effects of ...
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According to the Heckscher-Ohlin-Vanek (HOV) theory, besides labor force and capital other production factors such as energy and indicators of environment quality may affect exporting potentials of goods and services in an economy. Accordingly, the objective of this paper is to explore the effects of the main determinants, particularly carbon dioxide emission intensity, which is a proxy for environment quality, on the net exports of the selected manufacturing products (auto parts and petrochemical products) between Iran and its major trading partners. Basically, an econometric model for Iran’s net exports is applied to these trading products specifying two panel regression equations using the data of 21 Iran’s partners over 2000-2019. Empirical results have been obtained by estimating two regression equations of auto parts and petrochemical products net exports using panel GLS method. Based on the empirical results, there is a significant and negative effect of the ratio of Iran’s carbon dioxide intensity to that of its trading partner on net exports of auto parts, which implies a decrease in the trade deficit of these products. In contrast, the results show that the environmental quality significantly and negatively affects the net exports of the petrochemical products implying a rise in the ratio of Iran’s carbon dioxide intensity to that of its trading partner, which decreases Iran’s net exports of the petrochemical products.
International economy
Samira Motaghi; Anahita Saifi; Salah Ebrahimi
Abstract
The aim of this paper was to investigate the relationship between trade openness and inflation in selected developing and developed countries from 1990 to 2017 using a Panel data approach for testing Romer's hypothesis of relationship between inflation index and Trade Openness. The results of the paper ...
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The aim of this paper was to investigate the relationship between trade openness and inflation in selected developing and developed countries from 1990 to 2017 using a Panel data approach for testing Romer's hypothesis of relationship between inflation index and Trade Openness. The results of the paper show that the Romer hypothesis is rejected in both the studied groups (developed and developing). The results showed that the effect of trade openness on inflation rate was positive and significant in both groups. But the impact of trade openness on inflation has been greater in developing countries. The effect of money supply on inflation was positive and significant in both groups. According to other results of this study, GDP had a significant and negative effect on inflation. Also, the exchange rate has not been a determinant of inflation in developed countries but in developing countries it has had a positive effect on inflation.
