Iranian Journal of Economic Research

Abstract In this study, we examine factors influencing the Total Factor Productivity (TFP) in the Iranian economy. These factors are the percentage of higher education employees as proxy for human capital, the government research and development capital stock and the ratio of actual output to potential output as the index of capacity utilization. We estimate TFP using the ARDL (Auto-Regressive Distributed Lag) method covering data over the period 1968-2004. The results indicate that in the long run, the percentage of higher education employees, the government research and development capital stock and the capacity utilization have had positive and significant effects on productivity. In this period, in spite of increasing trend in human capital and the government R&D capital stock, TFP accounts for only five percent of the long run economic growth. The reasons for this meager share of TFP growth is reduced the degree of competitiveness, misallocation and inefficient use of resources in the economy.  

Abstract The main purpose of this paper is to investigate the sources of real exchange rate fluctuations in Iran by decomposing real exchange rate fluctuations into those attributable to real and nominal shocks. Using a structural VAR model along with Impulse-Response Function and Variance Decomposition Method, we find that real demand shocks play a significant role in explaining real exchange fluctuations in the context of the Iranian economy. About 85 percent of these fluctuations come from real demand shocks. Real supply shocks account for about 12 percent of the real exchange rate fluctuations in Iran. The overall result shows that real shocks dominate nominal shocks in real exchange rate fluctuations in Iran at all horizons.

Abstract In this paper, we study per capita GDP convergence in D8 countries. We test for convergence hypothesis using two approaches: Time series model (Augmented Dickey Fuller Test), and distribution model (Theil Inequality index and cross sectional variance). The time series model estimation results show that Indonesia, Malaysia, and Turkey converge toward the US. The result of convergence hypothesis test between Iran and other D8 countries shows that convergence has occurred between Iran ,Pakistan and Nigeria. Also, stochastic divergence has occurred between Iran, Pakistan, and Bangladesh. The results of distributive models show that the Inequality has been increasing among D8 countries since 1990. 

Abstract In this paper, we study the factors affecting changes in energy intensity in Iran. We use Fisher Ideal index in order to decompose the energy intensity into the structural changes and efficiency improvements in the Iranian manufacturing industries during 1993-2004. The results show that the structural changes have had a little effect in decreasing the energy intensity in the manufacturing industries in Iran. 

Abstract Electronic banking is one of the applications of the information and communication technology (ICT) in money market and banking industry. In this paper, we investigate the effects of electronic banking on the commercial banks profitability using an econometric model. The model is based on the* Structure-Conduct-Performance*  approach in which the return of total assets (ROA) depends on market concentration, bank size, the number of automated teller machines (ATM), and the membership in the SHETAB network. We estimate the model using a panel data method consisting of the six major commercial banks (Tejarat, Refah Kargaran, Sepah, Saderat, Mellat and Melli banks) over the period 1998-2004. The results show that the number of automated teller machines (ATM) has a positive effect on profitability of commercial banks and the effect increases after joining the SHETAB network. We conclude that the expansion of electronic banking has a positive and significant effect on the commercial banks profitability.                      

Abstract This paper studies the price change transmission mechanism from producer price index to consumer price index using Vector Autoregressive (VAR) model.  We use the monthly data on the PPI, WPI, and CPI for the period 1990:4 to 2005:3 The results from impulse response function suggest that a positive shock in PPI makes the WPI and CPI to rise immediately and it lasts for more than 12 months. Moreover, a positive shock in WPI makes CPI to rise but it becomes statistically insignificant in less than 6 months. Moreover, the variance decomposition of CPI suggests that PPI is the most influential factor in CPI changes, The variance decomposition of WPI also suggests that PPI is a significant factor in WPI changes.  

Abstract This paper studies the effect of real exchange rate uncertainty on private investment in Iran. We estimate the effect using a model for private investment in Iran and the time series data for the period 1977-2004. We use the GARCH method to construct an estimate of the real exchange rate uncertainty, and estimate the model by OLS method. The results show that the effect of uncertainty of real exchange rate on investment by private sector is significantly negative.

Abstract Identification of sources of disturbances in production and economic growth are amongst the most important macroeconomic discussions. There are fundamental differences between different economic schools with regard to factors creating business cycles. Research methodology of this paper is descriptive. It is based on the Iranian data for period of 1962-2005. To do this Tornvist index of total factors productivity has been in estimated. Then, using Blanchard- Quah method, temporary and permanent shocks have been decomposed. Results of study indicate that supply side shocks have significant effect on economic growth, and effects of demand side shocks on economic growth are transitory. Supply side shocks (productivity shocks) have accumulative effects on economic growth.

Abstract Investment as one of the important factors that has a positive impact on economic growth is expected to alleviate poverty in the long run. This paper studies the role of agricultural investment on economic growth and rural poverty in the rural areas of Iran. To estimate the model, we use the seemingly unrelated regression equations "SURE" and the time series date for the period 1971-2003  The results show that although agricultural investment has a positive effect on economic growth of this sector, the gains from the growth have not had a positive impact on poverty alleviation. It seems Iran agri-economic growth is not at the level that could affect the rural poverty and the benefit resulted from current growth rate does not trickle-down to the rural poor.