Iranian Journal of Economic Research

Abstract Since the 1970s, international political economic theorists have emphasized on the role of domestic factors, such as domestic active groups, policies and macro-economic indicators, to explain the  trade protection trends. Empirical studies have often verified this view. This paper  examines the determinants of tariff protection in Iran’s manufacturing industries by using panel data for the period 2001-2007.This research also investigates  the  effects of intra industry trade on tariff protection. The results indicate that value added and the ratio of production to import affect the tariff protection in Iran’s manufacturing industries. Also, intra-industry-trades and their  type, i.e. horizontal and vertical intra-industry trade, have negative effects on the protection. Based on the obtained results, we suggest that domestic industries activities in both domestic and foreign markets as well as intra-industry trade and competitiveness of trade  should be increased.   

Abstract In this study, we first identify boom and bust cycles in house real prices, defined as major and persistent deviations from long-term trends, and then analyze  the factors affecting the cycles. To identify the cycles, we follow the dating approach known as triangular methodology initially proposed by Harding and Pagan (2002) and used by many researchers, such as Jaeger & Schuknecht (2007) and Agnello & Schuknecht (2009). We  also apply the Probit model to estimate  the determinants of these cycles. The Probit model makes it possible to evaluate the marginal effect of each driving factors of housing prices on boom-bust probabilities. Results suggest that the growth of real liquidity balances has the largest and statistically significant marginal effects on the probabilities of booms in housing market.  This indicates that the expansionary monetary policy might lead to sharp booms in housing market through liquidity and credit expansion.

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 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.  

Abstract This study investigates the effect of density of economic activity, defined as  the intensity of labor and physical capital per square kilometer, on labor productivity in the Iranian provinces. . The density of economic activity has positive effects on labor productivity in several channels such as increasing returns to scale, knowledge spillover, and specialization. Also, the density of economic activity has negative effects on labor productivity because of  congestion and pollution. The empirical results show that a higher density of economic activity has led  to an increasing labor productivity in 28 provinces of Iran over the period 2001-2011. We find that  doubling  the density of economic activity on average increases  labor productivity by around 63 percent.  

Abstract We assess the definition and functions of money in modern economic thought in order to clarify the problems arising in Islamic Economics regarding lawfulness of compensation of devaluation in purchasing power of money. Our focus is on the fact that money in current economic activities is Fiat and its value is derived from government regulation and the promise of central bank and there is neither direct convertibility nor any intrinsic value for money. We also focus on the principle of justice in Imam Ali (a.s) viewpoint, Quran verses and economic theories to challenge the theory of nominal value of money. This paper concludes that money in current economic systems functions as the means of payment and consequently its devaluation should be compensated for clearance from obligation of lender and settling loans. Our main conclusion is the fact that this compensation is not considered as usury.

Abstract In this article, the monthly  data of Bahar Azadi gold coin price is studied by using Partially Exchangeable Sequences for a period of 27 years. The data based on the increasing or decreasing prices in comparison to the previous month generate a sequence of success and failure runs. The goal is to obtain the trend of ascending or descending of coin price by using runs. First, we verify partially exchangeability and determine the order of dependency data by using Monte Carlo simulation. Then, we determine the expected waiting time to achieve the first success runs of different lengths. The results show that the data are partially exchangeable with order one, and the average time to observe an increasing trend of the price of coin for the maximum six months is predictable.

Abstract