Research Paper
Information and communication technology economy
Esfandiar Jahangard; Teymour Mohammadi; Ali Asghar Salem; Forough Esmaeily Sadrabadi
Abstract
The question that is considered by researchers in the field of knowledge-based economy is that among the factors affecting intangible investment, does information and communication technology have a heavier weight than the rest of the factors? In this study, using the Corrado,Hulten and Sichel (CHS) ...
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The question that is considered by researchers in the field of knowledge-based economy is that among the factors affecting intangible investment, does information and communication technology have a heavier weight than the rest of the factors? In this study, using the Corrado,Hulten and Sichel (CHS) approach, the measurement of intangible investment is calculated. In their research, intangible investment has been divided into three major parts: computer information, innovative assets, and economic competencies. Then these three components are divided into nine parts. In this article, we select the component of information and communication technology, which is the first component of intangible transitory capital, and its effect on Total Factor Productivity(TFP) has been investigated. The field of study is manufacturing industries with a four-digit economic activity classification code for employees of ten and above during the years 1996 to 2018. Using panel data and GMM, the productivity function was estimated for manufacturing industries. The results of this research show that ICT has a significant role on the productivity of all production factors, and its coefficient is higher than other intangible investment components.
Research Paper
Monetary economy
Abbas Shakeri; Elnaz Bagherpour Oskouie
Abstract
High and continuous inflation in Iran's economy as a structural dilemma has adverse economic, political, and cultural outcomes, and to control the inflation, policymakers should employ appropriate and well-timed policies concuring to the economic structures of the country. Hence, this study points to ...
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High and continuous inflation in Iran's economy as a structural dilemma has adverse economic, political, and cultural outcomes, and to control the inflation, policymakers should employ appropriate and well-timed policies concuring to the economic structures of the country. Hence, this study points to distinguish and analyze the nature of inflation. For this reason, the present study examines the dynamics of the causal relationship between inflation and liquidity as well as the relationship between inflation and exchange rate by applying the continuous wavelet transform approach using monthly data during the years 1982 to 2021 in Iran’s economy. The results indicate: 1. Liquidity does not infulence the inflation rate in the long term and there is a reverse causality (causality from inflation to liquidity) and this result affirms the endogeneity of liquidity in the long term in Iran's economy. 2. The exchange rate growth shocks (from the supply side of the economy) affect inflation, in a way that the exchange rate altogether influences the inflation in both the short and long term.1.IntroductionAmid the last few decades, high and steady inflation has been a serious economic problem in Iran's economy. Empirical evidence suggests that in the years 1995, 1996, 2013, 2014, 2019, and 2020-21, Iran's economy has suffered from heavy and sequentional inflations. However, the perseverance of high inflation, especially since 2020, has turned into a fundamental problem. The main issue about the inflation in our country is not the inflation per se, but the critical status of it has faced development plans with great challenges for many years. Then again during the last decade, the economy tried to control inflation by restricting the growth of the money supply. But it appears that the results come to oppose established recommendations to curb the growth of liquidity. Therefore, the question raised in the present study is whether the high inflation rate in Iran's economy is due to the rise of the money supply.Although the relationship between inflation and liquidity in the economy has been examined in several studies, the significance of inflation and its relation with macroeconomic variables- the broad previous and subsequent link with other variables- exaggerates the study of the relationships among these variables and other macroeconomic variables in different time scales. In this regard, the present study examines the relationship among some key monetary and price variables in the economy (dynamics of the relationship between inflation and liquidity as well as inflation and exchange rate).2.Methodology and MethodsThere are several methods to examine the interrelationships of inflation, exchange rate, and liquidity that are commonly divided into the form of statistical methods as well as model-based methods. But, since the causal relationship between these variables is likely to change over time, so further exploration of those relationships requires techniques that consider the relationship between two variables over time and different time horizons (different friquencies). Unlike most statistical and econometric techniques, the wavelet approach does not require variables to be survivable, nor does it assume linear relationships between them. In contrast to time series techniques, the use of wavelet approaches, especially wavelet coherence and continuous wavelet transform approaches within the framework of the methodology of econophysics (econophysics), opens new horizons in the study of causality in time series, because it shows the possibility of dynamically examining effects at different frequencies by separating it to the short and long term. To this end, the present study, using the continuous wavelet transform approach, examines the dynamics of the causal relationship between inflation and liquidity and the relationship between inflation and exchange rate by applying monthly data during the years 1982:1 to 2020:12 in Iran’s economy.3. Discussion and ResultsGenerally speaking, based on what we've learned regarding the rooting of inflation in the our economy, it can be said that when the inflation rate increases and reaches a level higher than the average inflation (30 to 40 percent), such as when the average inflation rate shows lower figures, other monetary variables cannot be illustrative. Also, regarding the rooting of inflation, it can be said that in recent years, due to the adjustment policy, decrease of oil exports or sanctions, the demand for foreign currency exceeded its supply, and we witnessed instabilities in the exchange rate. Hence, the instability and fluctuations in the exchange rate and its concerned indicators do not exclusively follow monetary conditions.Therefore, the stability of exchange rates leads to the stability of prices and the limitation of monetary follow ups, and the resulting inflation itself causes more changes in the exchange rate in the next period.4. ConclusionIn the current economic situation, the appreciation of the exchange rate is the cause of inflation and high inflation is to a noteable extent the cause of the budget deficit and liquidity growth. Therefore, another factor is the supply side that causes inflation and is not a monetary factor. Therefore, in a situation where the endogenous creative forces of liquidity are active, relying on controlling the amount of money and liquidity as the goal of monetary policy and a solution to curb inflation will not work and will pave the way for speculators and unproductive agents. Therefore, in order to achieve the price stability, it is recommended that the monetary policy maker should a) avoid instant changes in relative and key prices (the most important of which is the exchange rate) and b) control the bank interest rate along with the structural reforms of the banking system in a way that the banking system moves toward optimal allocation of credit resources.
Research Paper
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.
Research Paper
Regional Planning
Bahareh Karami; Azad Khanzadi; Ali Falahati; Mohammad Sharif Karimi
Abstract
Equality of development opportunities is one of the socio-economic goals and a basic prerequisite for achieving economic stability and integrated progress in a country. In the present research, 69 development indicators related to cultural-social, educational, infrastructure, health-treatment, environmental ...
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Equality of development opportunities is one of the socio-economic goals and a basic prerequisite for achieving economic stability and integrated progress in a country. In the present research, 69 development indicators related to cultural-social, educational, infrastructure, health-treatment, environmental and economic sectors were analyzed to identify and compare the development opportunities of 30 provinces of Iran. Shannon's entropy method was used to determine the weights of the indicators and the TOPSIS method was used to rank the provinces in terms of access to the opportunities of each sector. Finally, by using the taxonomy technique, the degree of enjoyment of the provinces from a total of six opportunities was evaluated. The results show that there is a deep gap in the distribution and allocation of facilities and opportunities among the provinces of the country. Tehran province was the most privileged and Kurdistan, South Khorasan, Lorestan, West Azerbaijan and North Khorasan provinces were determined as the most deprived provinces. Based on significant difference among provinces, it is recommended that the priorities of the budget allocation be determined according to the degrees of benefits for the provinces. IntroductionThe growth and development of regions is condemned to be asynchronous; unequal and unbalanced development of different regions is one of the main challenges in most countries and economics. Due to many geographical, demographic and economic factors, Iran is prone to all kinds of regional inequalities and imbalances and is by no means an exception. The lack of balance among the provinces of a country can cause many harms, including damage to national unity, income gap, and limited areas enjoying the desired level of development and intensifying deprivation in other areas, immigration, geographic density, poverty, injustice and finally stopping development in all dimensions. The basic question that regional economic theorists try to answer is why some regions are more developed and growing faster than others and some are declining. In response to this controversial question, it is necessary to mention that the regional difference can be seen as a clear manifestation of the lack of equal access to opportunities, because inequalities are largely rooted in unequal opportunities. Therefore, the way of allocating resources and opportunities in societies is one of the important factors determining the distribution pattern of their growth and development. Methods and materialThe purpose of this study is to investigate, identify and analyze the situation of Iran provinces in terms of development opportunities during the period of 2006-2019. For this purpose, it is tried to calculate the index of development opportunities by using a comprehensive set of development indicators that are closely related to equal opportunities and also we use multi-criteria decision-making method, and then the provinces of Iran according to the degree of prosperity are ranked and classified. We also combine the sub-indices to make one-dimensional indices, by using TOPSIS technique with weighted entropy for six main indices; These indicators are: 1. Socio-cultural dimension, 2. Economic dimension, 3. Health-treatment dimension, 4. Infrastructural dimension, 5. Educational dimension and 6. Environmental dimension. Then, by using Taxonomy method, we combine six indices, to separate and grade provinces into five homogeneous groups based on the level of access to development opportunities.The statistical population includes all provinces of Iran (thirty provinces including Alborz province in Tehran province). The data has been extracted from the most important database of the country, namely the portal of the Statistical Center of Iran, while the time period has been limited according to the availability of provincial data. Results and DiscussionThe findings of the research show that Tehran province has the highest development opportunities among the provinces of the country. This province ranks first in the ranking of provinces in terms of educational, health, economic and cultural-social indicators, third in infrastructure and sixth in environmental indicators. Meanwhile, the seventeen provinces of Iran including Hamedan, Markazi, Chaharmahal and Bakhtiari, Yazd, Golestan, Kohgiluyeh and Boyer Ahmad, Zanjan, Kermanshah, Ardabil, Ilam, Kerman, Sistan and Baluchistan, Kurdistan, South Khorasan, Lorestan, West Azerbaijan and North Khorasan has been placed in the category of underprivileged or very underprivileged provinces in terms of development opportunities gains.It seems that advantages such as access to appropriate infrastructure like communication, physical and information networks, commercial services, proximity to skilled labor markets and competitive enterprises, as well as the ability to access research institutions have a great role in Tehran province situation compared to other provinces. ConclusionThe results showed that the hypothesis of uneven distribution of various facilities and services among the provinces of the country is confirmed, In other words, there are significant differences among the different provinces of the country in terms of development opportunities. Therefore, it is suggested to policy makers and planners to pay attention to the research done on regional opportunities and in their policies and orientations, and in addition to national approaches, consider regional development approaches by prioritizing provinces based on the degree of development and the level of prosperity, in the framework of planning based on land use. It is also suggested that in future studies, considering the scope of the concept of development opportunities and the quantitative and qualitative indicators of this category, these indicators be extended further so that more useful information is available to planners and policy makers in order to eliminate imbalances.
Research Paper
Welfare, poverty and income distribution
Bijan Baseri
Abstract
In this paper, attempts are made to empirically examine inequality in Iran which has hindered the government to achieve a balanced provincial socio-economic development. Income inequality affects economic growth sustainability through certain channels such as different saving rates of people, incentives ...
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In this paper, attempts are made to empirically examine inequality in Iran which has hindered the government to achieve a balanced provincial socio-economic development. Income inequality affects economic growth sustainability through certain channels such as different saving rates of people, incentives to work hard, political instability and other factors as a whole. The effectiveness of government policies to address a balanced and an equitable development needs of each province depends mainly on quality of existing institutions, individual participation and their capabilities to contribute to development effort in each province. Inequality in provinces is partly due to regional inequality which in turn stems from unequitable provincial privilege to some resources, production specializations, the degree of centralization and unequitable budget allocation. In addition, the orientation and expenditure allocations mechanism pursued by government, if not rightly targeted, may affect spatial planning and economic growth which ultimately brings about inequality. In the present study, we examine how government policies have contributed (if any) to achieve the balanced growth objectives in order to decrease the existing provincial inequality gap. Based on Theil’s and Williamsons indices, we estimated inequality coefficient in Iran’s provinces for the period of 2000 to 2019. The findings in this research show that the policy measures adopted by government in some provinces, have had mixed consequences. For some provinces it has contained and reduced the inequality and for some other province it has worsened the inequality gap over the same period. Based on Theil’s Index, inequality coefficient has increased in provinces such as Tehran and some other relatively more developed provinces and for less developed provinces the index has decreased. Government budget expenditures disbursed among various provinces have had a bearing on inequality through the provision of public physical investment, promoting education provision, expanding health care services and capacity building enhancement. Introduction Income inequality affects economic growth performance and create disparities among regions in a country. The income inequality gap among regions contribute to adverse outcomes resulting from economic growth. There are different arguments in this regard. One categories of views emphasize on negative aspects of income inequality and economic growth (Alesina and Rodrik (1994), Persson and Tabellini (1994)) Li and Zou (1998), Amos (1988), Barro (2000). The other one emphasizes on positive aspects of income inequality. The first view argues that income inequality encourages economic growth, because of effectiveness brought about by incentives, efforts made, skill level of individuals and household’s capabilities. It seems that part of inequality stems from regional disparities and non performing spatial policies. Spatial inequality is the result of economic and regional policy measures adopted by government. Some contributing factors to inequality originate in leading economic sectors, and some other factor have roots in government policies and in growth leading provinces. From theoretical point of view, income inequality stems from political instability and income distribution channel affected by higher progressive income tax rates in order to finance regional equalization needs.(Alesina and Rodrik, 1994,Galor,2006). It’s obvious that regions undergoing economic development process with a time lag, will benefit from the policy experienced by others. Kuznets (1955) determined the mutual relation between inequality and economic growth in inverted U shape in the state of economic development and Williamson (1965) Generalized it to regions. Barrios and Strobl (2009), Lessmann (2014), Lessmann and Seidel (2017), Neves (2016) concludes that in the higher phase of economic development the Kuznets inverted U curve will take N shape.The effect of income inequality on economic growth is different due to the level of economic development, government policies, and region’s capabilities. Methods and Material Regional Inequality is estimated by different methods. Williamson (1955) and Theil’s (1965) indices selected to estimate regional income inequalities in Iran’s provinces based on following relationship: In which, CVw is Williamson index and its quantity takes a range between 0 and ∞. yi is province per capita income. is national average per capita income. pi is province population and p is total population. Williamsons index measures inequalities using population shares of each province. we used the models for two specific periods,2000 and 2019. Data gathered from SCI (Statistical center of Iran) and regional statistics.The Theil’s indices have been estimated by following equations (Cowell,2009): in which, n is number of provinces , xi is province per capita income, stands for national per capita, is province income share, log shows variables in logarithm form. Computation is made using current prices. Share of each province in total government expenditure is taken as an indicator of resources allocation mechanism in order to estimate inequality and changes their in. Results and Discussion The result, based on Theil’s indices is shown in table below:Theil’s Inequality indices calculated for Iran, in2000 and 2019ProvincesProvince-wise disbursement of Government ExpenditurechangesTheils Indices in :20002019Arak1.82-0.2440.0480.036Gilan3.56-0.4350.0520.029Mazandaran4.22-0.0210.0380.037East Azarbyjan4.810.3130.0390.051west Azarbyjan3.670.1670.0320.037Kermanshah3.19-0.2330.0330.026Khuzestan6.99-0.3970.1250.076Fars7.26-0.2420.0740.056Kerman4.590.0820.0520.056Khorasan Razavi8.16-0.4240.1040.060Isfahan5.42-0.2400.0940.071Hormozgan3.04-0.2060.0590.047Sistan and Baluchistan4.07-0.2240.0330.026Kurdistan2.54-0.0610.0200.018Hamadan2.660.0780.0220.023Lorestan2.630.0650.0200.021Ilam1.47-0.2630.0160.012Zanjan1.790.0960.0240.026Chaharmahal and Bakhteyari1.79-0.0220.0150.015 Theil’s Inequality indices calculated for Iran, in2000 and 2019ProvincesProvince-wise disbursement of Government ExpenditurechangesTheils Indices in :20002019Kohgiluyeh and Boyerahmad1.47-0.0650.0130.012Semnan1.48-0.3790.0270.017Yazd1.95-0.0800.0390.036Bushehr2.13-0.3170.0620.042Tehran6.680.6410.0970.160Ardabil1.88-0.0110.0200.019Qom1.80-0.3610.0210.014Qazvin1.71-0.4820.0540.028Golestan2.350.0330.0200.020Khorasan shomali1.572.3680.0030.011Khorasan Jonobi1.661.0240.0060.013Alborz1.650.1720.0340.039Total100-0.1241.2961.135Reference: Author’s calculation Based on our findings, the inequality between two periods under study (2000 - 2019) has decreased from 1.296 to 1.136. In some province Theil’s coefficient of inequality has increased (e.g., East Azarbyjan, west Azarbyjan, Kerman, Hamadan, Lorestan, Zanjan, Tehran, Golestan, Khorasan Shomali and Khorasan Jonobi). Tehran has experienced minimum inequality changes between two periods. But Qazvin, Gilan and Khorasan Razavi have experienced maximum changes in inequality index over the same period compared to other provinces Conclusion In Iran, Government regional resource allocation through budget provisions has affected provinces differently in terms of inequality over the specified period. Each current and capital government expenditure allocated to provinces, has affected them differently due to privilege bargaining power enjoyed by some provinces and other relevant issues involved. Endogenous factors such as local and regional investment, local incentives, entrepreneurship, stability and managerial capacities as complementary elements have played an important role in decreasing regional inequality.
Research Paper
Welfare, poverty and income distribution
Hamed Ahmadi; Mohammad Reza Behboudi
Abstract
The Targeted Subsidies Policy (TSP) was implemented as one of the biggest economic reforms in Iran in 2009. However, after more than a decade, it did not achieve all its predetermined goals. Regardless of its positive effects, this research aims to identify and determine the adverse effects of this plan ...
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The Targeted Subsidies Policy (TSP) was implemented as one of the biggest economic reforms in Iran in 2009. However, after more than a decade, it did not achieve all its predetermined goals. Regardless of its positive effects, this research aims to identify and determine the adverse effects of this plan after its implementation, which led to the inefficiency of TSP. This research is based on Sandelowski & Barroso Meta-Synthesis method in which, by searching keywords related to the topic in scientific databases, the relevant researches were found and systematically reviewed. The search results were filtered by reviewing titles, abstracts, and content, and screened articles were evaluated using the CASP tool. Finally, 86 sources were selected and analyzed. By coding and categorizing the articles, nine main categories were identified as disadvantages and negative effects of TSP: negative effects on macroeconomics, negative effects on the production sector, unfair distribution, decreased welfare, failure to save or reduce energy consumption, energy smuggling and corruption, adverse effects on medicine and health, adverse effects on transportation, and adverse environmental effects. The findings can help to structurally reform the current method and prevent the repetition of past mistakes. Introduction The government pursues three main goals in paying subsidies, which include the optimal allocation of resources, economic stability, and fair income distribution. The inefficiency and unfairness of subsidy payment in Iran for many years have caused the government to implement the Targeted Subsidies Policy (TSP) in 2009. Several goals and justifications were proposed, including: 1) making the distribution system fair, 2) increasing economic efficiency, 3) creating more welfare effects of cash subsidy, 4) reducing the smuggling, 5) reducing government expenses, 6) ensuring transparency of cash subsidy, 7) protecting environmental.In the implementation process of TSP, policymakers followed two basic axes by making the energy prices real (market price). First, limited monthly quotas were allocated to each car with subsidized petrol pricing. Second, cash subsidy payments were made to households to improve income distribution. However, in practice, the intended goals failed to materialize and led to inefficient allocation of resources and market deviation.Previous research has focused on the implementation of TSP and has only studied specific aspects. Therefore, this research aims to identify the adverse effects of the implementation of TSP in various fields through conducting a systematic review with a meta-synthesis approach. It will clarify all negative effects and causes of its inefficiency. Methods and MaterialThis qualitative research, which utilized content analysis, is based on Sandelowski & Barroso's Meta-Synthesis method. The figure below briefly depicts its steps: First, sources were reviewed with the following criteria: geographical scope (Iran), language (English and Farsi), period (2010 to 2022), study method (qualitative, quantitative, mixed), analysis unit/society (all available resources regarding the implementation of the TSP), conditions of the study (evaluation of the effects of the implementation of the TSP), and type of resources (articles published in journals and conferences, news and interviews, and official analytical reports).Next, resources were systematically searched based on related keywords in different sources. Finally, 486 articles (403 Persian articles and 83 English articles) were found. After a detailed review of titles, abstracts, content, and research method in line with the research question and purpose, 112 articles were selected. By using the Critical Appraisal Skills Program (CASP) tool to evaluate the quality, 86 sources were used as the basis for this research.In the process of data analysis, 538 codes were identified and categorized into 46 sub-categories. By using the concepts of these codes, the adverse effects of the implementation of the TSP were identified in nine categories. The Kappa index was used to control the quality of the study, which was accepted due to the coefficient (0.733). Finding and Discussion Based on the frequency of findings (codes) in the analyzed sources, the identified categories are as follows: (1) negative effects on macroeconomics, (2) negative effects on the production sector, (3) unfair distribution, (4) decreased welfare, (5) failure to reduce energy consumption, even increase it (6) energy smuggling and corruption, (7) adverse effects on medicine and health, (8) adverse effects on transportation, and (9) adverse environmental effects (see Figure 1). The main reasons for the occurrence of these adverse effects, which led to inefficiency and failure to achieve the predetermined goal of TSP are as follows:The government's inability to accurately identify the target groups for the subsidy caused a waste of resources and even a deficit in the government's budget.Failure to increase the price of energy carriers in line with inflation has caused destructive effects.Allocation of petrol subsidy to cars, while low-income people mostly do not have any car.Payment of cash subsidy to all people, without having a significant effect on welfare, causes an increase in liquidity and waste of resources, and serious damage to the country's economic system.5.Failure to pay the share of the sectors mentioned in the law, such as production, health, and modernization of the transportation fleet, due to budget deficits.Due to political priorities, governments do not want to change the method of implementing this policy. Conclusion To provide an integrated and comprehensive view of the adverse effects of implementing the TSP after 12 years, this study analyzed all research conducted in this respect. The results of this meta-synthesis research showed nine main adverse effects of the implementation of the TSP. Based on the findings of the study and the suggestions made in the reviewed research, some practical solutions are suggested.The government's inability to accurately identify target groups is a structural weakness, and it is necessary to assume the impossibility of categorizing people's income levels. Therefore, to present an executive solution currently, it is necessary to allocate subsidies to people instead of cars so that people without vehicles can also benefit. In addition, the price of energy carriers should float and close to its global price.The government must stop the cash subsidy payment and replace it with other supporting methods. By setting energy pieces at the global leverl, government support payments to the public service sectors (mentioned in the law) can be guaranteed. Furthermore, reforming the country's economic structure in the long term should be prioritized instead of considering short-term political goals that are often propaganda.In conclusion, this study reveals that the implementation of TSP has resulted in numerous adverse effects on various sectors of Iran's economy and society. The identified reasons for these negative impacts can help policymakers to reform the current subsidy distribution system and prevent the repetition of past mistakes.
Research Paper
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.
