Ebrahim Zare; Mehrzad Ebrahimi; Abbas Aminifard; Hashem Zare
Abstract
The purpose of this study is to examine the relationship between government size and happiness inequality in a number of developing and developed countries during the period of 2002-2015 by threshold panel approach. To obtain robust results, we have applied the model in the Iran’s economy by time ...
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The purpose of this study is to examine the relationship between government size and happiness inequality in a number of developing and developed countries during the period of 2002-2015 by threshold panel approach. To obtain robust results, we have applied the model in the Iran’s economy by time series data during the period of 1974-2016. The results in developing countries showed that in small governments, the government size had a diminutive effect on the inequality of happiness, but by passing the threshold and increasing the government's involvement in the economy, this variable had no significant effect on the happiness inequality. The same time series results were obtained for Iran’s economy, which has a small government size. In this group, the government size has a significant negative impact on happiness inequality and after that, it has a significant positive impact on happiness inequality. Developed countries showed completely different results, whereby the size of the government had a significant positive impact on inequality in small governments but in large governments, it did not have a significant effect on the inequality of happiness.
Ehsan Asadi; Hashem Zare; Mehrzad Ebrahimi; Khosrow Piraiee
Abstract
In this study, a model of Bayesian Dynamic Stochastic General Equilibrium (DSGE) from Real Business Cycles (RBC) approach with the aim of identifying the factors shaping price bubbles of Tehran Stock Exchange (TSE) was specified. The above-mentioned model was conducted in two scenarios. In the first ...
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In this study, a model of Bayesian Dynamic Stochastic General Equilibrium (DSGE) from Real Business Cycles (RBC) approach with the aim of identifying the factors shaping price bubbles of Tehran Stock Exchange (TSE) was specified. The above-mentioned model was conducted in two scenarios. In the first scenario, the baseline model with sentiment shock was examined. In this model, stock price bubbles appear endogenously in a positive feedback mechanism that is supported by people optimism. In the second scenario, only sentiment shock is absent from the model. According to the results obtained from the estimation of marginal likelihood model based on Laplace approximation, the baseline model is more in accord with Iran’s economic structure and real data. Consequently, the sentiment shock had a dominant role in creating stock price fluctuations and macroeconomic variables. Based on the results of variance decomposition model, sentiment shock was also recognized as the most important source of fluctuations in bubbles and subsequent fluctuations in stock prices. This shock reflected households’ beliefs about the approximate size of previous bubbles over the recent ones and was passed to the macroeconomic by credit constraints. In this way, this shock also described a major part of the fluctuation of consumption and output. Sentiment shock explained about 86% of stock price fluctuations, 47% of consumption fluctuations, and 39% of output fluctuations.