Iranian Journal of Economic Research

Abstract Using an Autoregressive Distributed Lag approach & cointegration analysis, this paper examines the impacts of anticipated and unanticipated shocks to official exchange rate on black market exchange rate premium in Iran for the period 1980:1 – 2001:1. Following Barro (1977), Hoffman et al. (1984) and Pozo and Wheeler (1999) a two-stage model is developed to study the long-run movement of black market premium. In the first stage, we construct a forecasting equation for the official exchange rate. The predicted values of official exchange rate obtained from this equation are used to measure the anticipated shocks. The residuals of the estimated forecasting model are used as a measure of unanticipated shock to official exchange rate. In the second stage, we regress the black market premium on anticipated and unanticipated shocks derived in the previous stage. The results indicate that both anticipated and unanticipated shocks to official exchange rate have a significant negative impact on the black market premium in Iran. It is found that an unanticipated increase in the official exchange rate has a greater impact on the black market premium than the anticipated one. Using dummy variable technique to study the possibility of structural break in the premium movement, the paper finds that the policy of exchange rate unification of 1993 has changed the intercept and the slope of the premium equation. This means that this policy has caused a structural change in the premium movement. More specifically, the intercept has decreased and the slope has increased dramatically after the unification. Indeed, the anticipated devaluation of official exchange rate has had a positive impact on the black market premium between 1993 and 1995. Finally, the cointegration tests verify the existence of a long-run equilibrium relationship among variables.   

Abstract In this article, we introduce a new concept of Health Capital, and use the augmented Solow model with data from 33 developing countries to analyze the effect of health expenditures on Economic growth. The results show that in addition to physical and human capital, health capital have positive and significant effect on Economic growth, via health expenditures. Also, the Hausman test for simultaneity shows that the health expenditures variable can be affected by Economic growth. 

Abstract The empirical studies have indicated that the contribution of information and communication technology to growth in developed and some developing countries are significant, particularly in the second half of the 1990s.There is still room for more investigation, specially in developing countries, where the socio-economic infrastructure may not fully support the positive link between ICT & economic growth. This paper employs an endogenous growth model to estimate the contribution of ICT in the Iranian economic growth using the state space method. This study reveals a positive and significant effect of communication investment on the economic growth in the late 1990s. Our results suggest that an increase in the ICT expenditure across various economic activities as well as improved complementary factors will eventually lead to higher economic growth.  

Abstract Tobin’s q model is one of the most important neoclassical investment theories which has been used in various empirical studies. In this paper, using the theory and panel data, the relationship between the investment by the Iranian firms & the corporate tax is examined.

Abstract The aim of this study was to investigate factors affecting repayment of agricultural loan in FarsProvince, using the data collected from the Agricultural Bank and 163 questionnaires filled out in the Province of Fars. The farmers were divided into repayment and defaulter groups and discriminant analysis model was used.
    Discriminant analysis function results in Fars Province indicated that natural losses, proportion of farm income to total income, crop insurance, farm income, saving, expected time period, the Bank supervision, repayment period time, type of activity, diversity index, market situation, non-farm income, acreage, education and town dummy variables separate two groups of farmers.
    Among variables in discriminant analysis function, natural losses and expected time period for receiving credit caused the probability of loan repayment to decrease, but the other variables to increase. Finally, some recommendations are made to improve repayment tendency and ability of borrowers.

Abstract Due to the importance of production of pipes in oil and gas industries, the estimation of oil and gas pipe production function is of great interest. To this end, Ahvaz pipe mill, the largest pipe mill in Iran, has been chosen as a case study and its production function during 1979-2003 has been estimated. This estimation is based on time-series techniques, using unit root tests, cointegration and error correction models. The results suggest that Cobb-Douglas production function is more compatible with theory of production function & the data than alternative specifications. The imperical findings show that the error correction term is 0.96, labour elastisity and capital elastistiy are 0.58 and 0.53, respectively. The wald test result indicate that there is increasing return to scale.

Abstract This paper investigates the potential of industrial sector in generating  indirect employment in its sub sectors. To determine the ability of Job creation, the demand for labor function in each sub sector is estimated, augmented by the demand for Labor growth matrix using the ISIC code. Then, the long term relation between employment and capital stock is tested Using ARDL and Johansen Method. Finally, for ranking indirect employment generating potential, Input-Output accounting and semi social accounting frame work are used. Results show that clothing and leather, and textile sub sectors, with 13 and 12 employee respectively, have the largest employment coefficient, and therefore, the greatest employment generating potential. The direct employment coefficients for these sub sectors are the largest, showing the larger potentials to create employment. 

Abstract This paper aims at estimation of own price elasticity, cross price elasticity and elasticity of saving with respect to income and price in the framework of the linear expenditures system (LES). Our findings show that aggregate marginal propensity to expenditure (MPC) is 0.72 beverange, fast food and tobacco products, and housing are 0.098 and 0.08, respectively.  The lowest MPC belongs to flour, cereal and bread with 0.028. Estimated income elasticity of goods and services dedicate that foods (excluding beverage, fast food and tobacco products) are necessity but housing, transportation, communication and entertainment are luxury. The price elasticity of saving reveals that any increase in flour and products, meat, milk and products, edible oils, fruits and vegetables, clothing and footwear will result in a decrease in the saving. The income elasticity of saving is 2.45.