Majid Maddah; Mahboobeh Farahati
Abstract
The tax-expenditure hypothesis posed by Milton Friedman emphasizes a positive causal relationship between government tax revenues and government expenditures. If citizens do not have a correct perception of the real tax burden and under-estimate the price of public goods and services, there is a negative ...
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The tax-expenditure hypothesis posed by Milton Friedman emphasizes a positive causal relationship between government tax revenues and government expenditures. If citizens do not have a correct perception of the real tax burden and under-estimate the price of public goods and services, there is a negative causal relationship between tax revenues and government expenditures, which indicates existence of fiscal illusion. Using quarterly data. for the period 2001-2012, this paper investigates fiscal illusion in Iran. In order to achieve this goal, two symmetric and asymmetric error correction models, are estimated. According to results from Wald test in symmetric model, there is a negative causal relationship between real tax revenues, and real government expenditures. This result hence, confirms the presence of fiscal illusion in Iranian economy. Moreover, the results obtained from the asymmetric model show that there is merely fiscal illusion in the case of tax revenues reduction and there is no Granger causal relationship for the positive changes of tax revenues. Therefore, by a decline in tax revenues, government expenditures increase after a year due to fiscal illusion. Thus, it seems that in the state of government's budget deficit, raising the taxes is an efficient instrument.
Vahid Shahabinejad; Mohammad Reza Zare Mehrjerdi; Morteza Yaghoubi
Abstract
The aim of this paper is to analyze total factor productivity (TFP) growth and its components in Asian countries applying Stochastic Frontier Analysis (SFA) to the time series data of 44 Asian countries from 2000 to 2010. Using Battese and Coelli approach, TFP is divided into technical efficiency change ...
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The aim of this paper is to analyze total factor productivity (TFP) growth and its components in Asian countries applying Stochastic Frontier Analysis (SFA) to the time series data of 44 Asian countries from 2000 to 2010. Using Battese and Coelli approach, TFP is divided into technical efficiency change and technical change. TFP decomposition using SFA method for the years 1998 to 2007 indicates that in 75 % of these economies, the role of technical change in productivity growth is negative. Only in 11 countries technical change had a positive role in productivity growth. The growth of TFP shows that Japan has the highest productivity growth (2.55 %) and Saudi Arabia, Korea and Hong Kong are located in subsequent positions. Furthermore, due to the lowest technical progress, newly independent countries, such as Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan have the slowest TFP growth.
Saeed Rasekhi; Marzieh Dindar Rostami
Abstract
The purpose of this study is to investigate the factors affecting the manufacturing industry wage among selected developing countries based on new economic geography theory. More specifically, we use a panel data model to study the spatial structure of wages in 136 countries for the period 1998-2007. ...
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The purpose of this study is to investigate the factors affecting the manufacturing industry wage among selected developing countries based on new economic geography theory. More specifically, we use a panel data model to study the spatial structure of wages in 136 countries for the period 1998-2007. The results indicate that this theory provides a good description of the spatial structure of wages. We find that the market size and the distance-weighted have positive relationships with wage. However, the price of non-tradable goods has a negative effect on the spatial structure of wages. The result shows that the conditions governing the labor market is more important in explaining wage inequalities than the characteristics of labor or labor productivity.
Abstract
In recent years, investigating synchronization of business cycles among countries, after increasing integration of global economies, has been attracted more attention of policy makers and researchers. Perhaps an unknown origin of such similarities, as an open question, is the main reason of these interests. ...
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In recent years, investigating synchronization of business cycles among countries, after increasing integration of global economies, has been attracted more attention of policy makers and researchers. Perhaps an unknown origin of such similarities, as an open question, is the main reason of these interests. So, with regard to the mentioned question, the aim of this paper is to investigate some probably determinants of synchronization among Iran’s main trade partners. Therefore, in the first step, in order to measure business cycles, some parametric and non-parametric techniques are used. Then, applying several criteria, the degree of synchronization is determined. After these two steps, employing IV-GLS and QR estimators, the relationship between business cycles and trade intensity index, as a possible channel of synchronization, has considered. The result shows that an increase in trade intensity index increases business cycle synchronization for all 21 sample countries. Also, this result remained almost unchanged when we divided sample into some subsamples. It is worthy to note that due to the endogeneity of independent variable, the gravity equation and Helpman theorem(1981) are employed. In these equations, some variables such as GDP, common borders and distance had significant effects on trade intensity and hence on business cycles
Yadoolah Dadgara; Rohollah Nazari
Abstract
Over the past few decades, good governance has become an important issue in public administration. One key reason behind this reality is the paramount role of government in promoting sustainable development and protecting the environment. Therefore, evaluating the impact of good governance on the quality ...
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Over the past few decades, good governance has become an important issue in public administration. One key reason behind this reality is the paramount role of government in promoting sustainable development and protecting the environment. Therefore, evaluating the impact of good governance on the quality of the environment could be taken into consideration by both economic researchers and policy makers. This paper deals with the impact of good governance on the environmental pollution in Iran and its competitors of 2025 vision document (i.e., South West Asian Countries, SWAC) over the period of 2002-2015. The results maintain that government effectiveness, quality of law, rule of law and control of corruption (as representative indicators of good governance) have significant effect on pollution. The degree of the economic openness and economic growth do indicate negative and significant relation with environment pollution as well. Therefore, improving good governance indices in selected countries including Iran could potentially reduce the pollution over there.
Saeed Rasekhi; Soraya Mohammadi
Abstract
Tourism is a multidimensional economic activity that has an interaction with the environment. On one hand, environmental resources provide the raw material for tourism, while on the other, tourism imposes a variety of negative and positive impacts (wanted or unwanted) on the environment through the creation ...
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Tourism is a multidimensional economic activity that has an interaction with the environment. On one hand, environmental resources provide the raw material for tourism, while on the other, tourism imposes a variety of negative and positive impacts (wanted or unwanted) on the environment through the creation of various by-products. The main purpose of the current study is to investigate the relationship between tourism and environmental performance in the Caspian Sea nations during 2002-2013. A panel data vector autoregressive (P-VAR) method has been employed to estimate the model. Findings from the impulse-response function analysis and variance decomposition show that the reactions of international tourism to environmental performance, human development index, gross domestic product (GDP) per capita, and the degree of trade openness in the Caspian Sea nations are positive. Moreover, the reaction of environmental performance to tourism and GDP per capita shocks is negative. The results also show that the responses of environmental performance to human capital index, the degree of trade openness and the square of GDP per capita shocks are positive. According to the findings, it is suggested that countries in the Caspian Sea region should pay a special attention to environmental issues in the development of tourism.
Hiva Rahiminia; Beitollah Akbari Moghada; Mohammad Reza Monjazeb
Abstract
Despite the implementation of the first phase of fuel subsidy targeting in December 2010, there are still debates over the economic impact of this project in Iran. A CGE model is used to analyze the impact of fuel subsidy targeting in Iran in four different scenarios. The data are used in the framework ...
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Despite the implementation of the first phase of fuel subsidy targeting in December 2010, there are still debates over the economic impact of this project in Iran. A CGE model is used to analyze the impact of fuel subsidy targeting in Iran in four different scenarios. The data are used in the framework of SAM for the year 2001. In all scenarios, indirect subsidies are removed completely and replared with direct subsidies to households, manufacturing and service sectors and government institutions. The findings of this paper show that the effect of fuel subsidy targeting on economic variables depends on the way this policy is implemented. We find that an increase in the income of low-income household results in an increase in the production level of basic goods. Moreover, the result shows that the mining industry, glass and other non-metallic minerals and other service sectors have comparative advantages. In all senatrios, the elimination of in direct subsidies results in stagflation. The inflation rate resulted from this policy is predicted to be between 16.1 to 21.1 percent. Furthermore, in all senariors, higher direct payments of subsidies to households are associated with higher growth and inflation rates and lower balance of payments.
Teymour Mohammadi
Abstract
The aim of this paper is to assess the sign and magnitude of the nonlinear effects of main socio-economic variables as well as the financial development index(measured by private credit to GDP ratio) on the environmental pollution. Specifically, the interaction of the socio-economic variables with financial ...
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The aim of this paper is to assess the sign and magnitude of the nonlinear effects of main socio-economic variables as well as the financial development index(measured by private credit to GDP ratio) on the environmental pollution. Specifically, the interaction of the socio-economic variables with financial development as a threshold variable in affecting CO2 emission is studied. In this respect the PSTR(Panel Smooth Transition Regression) technique is applied to a panel-data set for 16 middle income countries (including Iran) during the period 1970-2013.It is found that output level and energy use have positive significant effect on CO2 emission on the whole but their effects at higher levels of financial development decrease and increase respectively i.e. financial development has provided motivations for shifting to eco-friendly technologies on the whole but has not been effective for applying fuel efficient technologies . The effect of population on CO2 emission at higher levels of financial development, intensifies . As to the effect of financial development ,it has a positive significant effect on pollution with a threshold level of 34 percent for financial development index i.e. up to this point ,the effect of financial development on the increase of pollution, rises at an increasing rate
Parviz Rostamzadeh; Ali Hussein Samadi; Zeinab Yadegar
Abstract
Banking system is considered as one of the most important economic sectors of every country. Because of the dependency between the performances of different sectors in economy, instability in banking sector will lead to disorder in all the other economic sectors. Marketization can influence banking stability. ...
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Banking system is considered as one of the most important economic sectors of every country. Because of the dependency between the performances of different sectors in economy, instability in banking sector will lead to disorder in all the other economic sectors. Marketization can influence banking stability. The primary objective of the present study is to investigate the relationship between marketization and banking stability in Iran. This study investigates the effect of institutional quality on the relationship between marketization and banking stability. Accordingly, the Generalized Method of Moments (GMM) and Panel Threshold Regression (PTR) techniques were used to estimate the models. The results of GMM indicated a decrease in banking stability after marketization. An improvement in institutional quality, however, could improve the relationship between marketization and banking stability. The results obtained by the PTR analysis revealed that institutional quality had a threshold value which could affect the relationship between marketization and banking stability and led to different relationships between marketization and banking stability under different regimes
Hossein Marzban; Parviz Rostamzadeh; Jafar Ghaderi; Abdulhamid Khosravi
Abstract
The purpose of the present research is to investigate the effective channels of the monetary transmission mechanism in Iran. To do so, we devised a New Keynesian Dynamic Stochastic General Equilibrium Model. In our model, the different types of nominal rigidities are introduced beside all the related ...
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The purpose of the present research is to investigate the effective channels of the monetary transmission mechanism in Iran. To do so, we devised a New Keynesian Dynamic Stochastic General Equilibrium Model. In our model, the different types of nominal rigidities are introduced beside all the related structural equations, which are extracted and linearized around a steady state point. Furthermore, to design the DSGE model, two different monetary rules—Taylor and McCallum rules—are used. In other words, the different channels of monetary mechanisms are investigated on the basis of these two rules. To estimate the two mentioned models, seasonal data for the period 1990–2015 are collected. The estimation method used in the study is the Bayesian method. According to the results obtained from variance decomposition, in the Taylor rule-based, q-Tobin, interest rate, wealth and expectation channels are the effective channels in monetary transmission mechanisms; also, in the McCallum rule-based model monetary policy, wealth and expectation channels are the effective channels in monetary transmission mechanisms. In addition, based on the simulation results in the Taylor model, increasing interest rate causes a reduction in output, consumption, investment and capital utilization rate, and in the McCallum model, a positive monetary shock can cause an increase in preceding variables, which is a result of price rigidity.
Seyyed Ali Paytakhti Oskooe; Ehsan Shafei
Abstract
This paper examines the theory of purchasing power parity aboutthe exchange rate of the dollar with local currencies in MENAcountries - the Middle East and North Africa - using a unit root testestablished on the quantile auto regressive model during the period1980-2017. This test, like other unit root ...
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This paper examines the theory of purchasing power parity aboutthe exchange rate of the dollar with local currencies in MENAcountries - the Middle East and North Africa - using a unit root testestablished on the quantile auto regressive model during the period1980-2017. This test, like other unit root tests, uses auto regressivemodel, unlike other methods that emphasize the mean of thedependent variable, this test employees different variables orquantiles for estimating the regression. If the theory of purchasingpower parity is in place, the real exchange rate will be stationary.According to the results of quantile unit root test, the real exchangerate for dollar in all countries except the four countries ofMorocco, Bahrain, Saudi Arabia and Jordan has a unit root and isnot stationary. Therefore, except for the four countries mentioned,the theory of purchasing power parity is not true in other studiedcountries. This result could be due to the difference inmacroeconomic conditions and less flexibility of the foreignexchange system in these countries compared to developedcountries.
Monetary economics
Ali Cheshomi; Fariba Osmani
Abstract
Despite the recession in global financial markets, the Tehran stock Exchange experienced significant growth during the COVID-19 outbreak. Therefore, this article tries to solve this puzzle by analyzes the effect of three Coronavirus waves on the total index of Tehran stock Exchange, its sub-indices, ...
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Despite the recession in global financial markets, the Tehran stock Exchange experienced significant growth during the COVID-19 outbreak. Therefore, this article tries to solve this puzzle by analyzes the effect of three Coronavirus waves on the total index of Tehran stock Exchange, its sub-indices, and the different industries with daily data of Iran and the regression method with multiple breakpoints. The results show that each wave of COVID-19 have different effects on the stock market. COVID-19 in the first wave had a negative effect on the index of industries such as refined petroleum, chemical, Metals and transportation but had a positive effect on industries such as medicine and food. But in subsequent waves, response of different industries to the new pandemic is complicated for two reasons. First, the nominal exchange rate has positive and significant effect on main industries such as motor mehicles, banks, refined petroleum, metals and chemical (which have a considerable weight in the Tehran Stock Exchange), can show the positive trend of the index, especially in the first and second waves of the COVID-19. Second, the government's manipulatian in raising the stock prices of these main industries to finance its budget deficit caused the Tehran Stock Exchange index to move in the opposite direction in some periods in response to the Corona virus.
Energy Economics
Hossein Amiri; Mohammad Hossein Karim; Fariba Asadi
Abstract
Despite the high potential of geothermal reservoirs in Meshkinshahr, we only see the government entering the electricity extraction of geothermal energy because the cost of the Meshkinshahr geothermal electricity is higher than the balanced price of the electricity market and the private sector is disadvantaged ...
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Despite the high potential of geothermal reservoirs in Meshkinshahr, we only see the government entering the electricity extraction of geothermal energy because the cost of the Meshkinshahr geothermal electricity is higher than the balanced price of the electricity market and the private sector is disadvantaged for entering it. So, the government has adopted a feed in tariff policy for geothermal electricity to encourage private sector investors. This research is aimed at financial appraisal of Maskinshahr geothermal power plant with the assumption of feed in tariff by the government with Equivalent Uniform Annual Worth, Equivalent Uniform Annual Worth, and Equivalent Uniform Annual Cost methods. Equivalent Uniform Annual Benefit is obtained from feed in tariff of government and Equivalent Uniform Annual Cost is determined based on technical and economic components of the geothermal power plant and macroeconomic parameters. The results of the data analysis show that the construction of the geothermal power plant is fully justified with the 14% reduction rate, but if the investor's minimum expected rate exceeds 54%, the construction of the power plant has no economic justification. Also, if the construction of Meshkinshahr geothermal plant takes more than 13 years and 5 months like the government project, the generation of geothermal power is not cost-effective.
Social Economic
Sajjad Barkhordari
Abstract
Nowadays, the study of unemployment properties is particularly important as a result of the increase of this variable in recent years. This paper tests the hysteresis hypothesis in youth unemployment at the urban, rural, regional, and general level by using quarterly data in period 2000- 2018. In addition, ...
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Nowadays, the study of unemployment properties is particularly important as a result of the increase of this variable in recent years. This paper tests the hysteresis hypothesis in youth unemployment at the urban, rural, regional, and general level by using quarterly data in period 2000- 2018. In addition, this paper investigates the stochastic nature of unemployment for thirty regions of Iran. We first employ the ADF and KPSS methods to test the hysteresis hypothesis at the urban, rural and general levels. Second, we apply the IPS, Chio and Fisher methods to examine this test for thirty regions using quarterly data in the period 2005-2018. Finally, the PANIC method is applied to identify the common and idiosyncratic components of unemployment rates at the regional level. The findings of different methods give support to the existence of hysteresis for the youth unemployment at the urban, rural and general level. Also, our empirical findings provide that the evidence is favorable to the existence of hysteresis in some regions. These results implicate supply side policies are effective to reduce youth unemployment at different levels. Also, our empirical findings provide that the evidence is favorable to the existence of hysteresis in some regions. These results implicate supply side policies are effective to reduce youth unemployment at different levels.
Sadegh Bakhtiari; Farzam Sajjadieh
Abstract
Resilience is defined in different ways by different disciplines and different authors but in general resilience may be defined as the ability of a system and its component parts to anticipate, absorb, accommodate, or recover from the effects of a hazardous event in a timely and efficient manner. Resilience ...
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Resilience is defined in different ways by different disciplines and different authors but in general resilience may be defined as the ability of a system and its component parts to anticipate, absorb, accommodate, or recover from the effects of a hazardous event in a timely and efficient manner. Resilience is applicable at the micro as macro level, and for this reason, is sometimes defined as the ability of an individual, a household (micro level), a community, a country or a region (macro level) to withstand, cope, adapt, and quickly recover from shocks without compromising long-term development. In this paper economic resilience is defined as the capacity of an economy to resist shocks and withstand the effects of a shock and to avoid the shock altogether. The paper tries to follow the UNDP procedure in presenting Human Development Index , so the same procedure will be followed to provide an Economic Resilience Index (ERI). This resilience index will be applied for a group of developing countries including Iran and the finding will be analyzed.
Hossein Asgharpour; Elham Vafaei; Hamed Abdolmaleki
Abstract
The main objective of this paper is to investigate the asymmetric effects of exchangerate on Iranian import price index using quarterly time series data over the period 1990- 2011. For this purpose, positive and negative shocks of the exchange rate have been separated from each other using dummy variables ...
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The main objective of this paper is to investigate the asymmetric effects of exchangerate on Iranian import price index using quarterly time series data over the period 1990- 2011. For this purpose, positive and negative shocks of the exchange rate have been separated from each other using dummy variables and the effects of the size of the exchange rate shocks by determining a threshold.The empirical results indicate that the positive and negative shocks of the exchange rate both have positive and asymmetric effects on the import price index. The results show that the effects of negative shocks of the exchange rate on the imports price index is more than the positive shocks effect. In addition, the experimental findings of the research indicate that the effect of foreign exchange rate shocks size on the imports price is asymmetric and the effectiveness extent of smaller shocks is significantly more than that of bigger exchange rate shocks.Moreover, according to the results, the effects of positive and negative shocks based on the size of foreign exchange shocks (small & big) on the imports price is asymmetric and the results show that the effect of small negative shocks is more than big ones and also the effects of small positive shocks is more than big ones.
Afsaneh Kazemi Mehrabadi; Vahid Taghinezhad Omran; Mohammad Valipour Khatir; Saeed Rasekhi
Abstract
Forecasting industrial production is essential for efficient planning by managers. Although there are many statistical and mathematical methods for prediction, the use of intelligent algorithms with desirable features has made significant progress in recent years. The current study compared the accuracy ...
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Forecasting industrial production is essential for efficient planning by managers. Although there are many statistical and mathematical methods for prediction, the use of intelligent algorithms with desirable features has made significant progress in recent years. The current study compared the accuracy of the Artificial Neural Networks (ANN) and Adaptive Nero-Fuzzy Inference System (ANFIS) approaches to assess the current state and predict the future state of industrial production. The seasonal dataset comprised the labor force, capital stock, human capital, trade openness, liquidity and credit financing to the industrial sector as input variables and value added of industrial production as the output variable for the period of 1988 to 2018. The dataset was used to forecast industrial production for Seasons of the year 2019 and 2020. The results showed that, while both are appropriate tools for forecasting industrial production, ANFIS had a lower the Mean Squared Error (MSE) and Mean Absolute Percentage Error (MAPE) than ANN. The findings of the research indicate that ANFIS is more effective in forecasting industrial production, which can help policymakers in planning and creating an effective strategy for the future.
Ali Mohammadi; Ahmad Rajabi
Abstract
Abstract In this paper, Markov chain and dynamic programming were used to represent a suitable pattern for tax relief and tax evasion decrease based on tax earnings in Iran from 2005 to 2009. Results, by applying this model, showed that tax evasion were 6714 billion Rials**. With 4% relief to tax payers ...
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Abstract In this paper, Markov chain and dynamic programming were used to represent a suitable pattern for tax relief and tax evasion decrease based on tax earnings in Iran from 2005 to 2009. Results, by applying this model, showed that tax evasion were 6714 billion Rials**. With 4% relief to tax payers and by calculating present value of the received tax, it was reduced to 3108 billion Rials. With regard to transition periods of tax-receipt and its discount index, the present value of future tax cash flows, during the future period, were 16034 billion Rials. Also, by means of dynamic programming, the break–even-point of tax relief index was determined. Consequently, if the discount rate were less than 22%, the optimal policy to increase tax revenue would be not to give discount and if it were more than 22%, the favorable policy would be to offer discount to tax payers.
International Economics
Mirreza Fazelian; Khadije Nasrollahi; Hadi Amiri
Abstract
Abstract:The purpose of this research is to criticize the Iranian governments’ policies supporting the Foreign Direct Investors. In this regard, 243 questionnaires have been distributed among actual investors (active in the country) and 107 questionnaires among potential ones; by collecting and ...
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Abstract:The purpose of this research is to criticize the Iranian governments’ policies supporting the Foreign Direct Investors. In this regard, 243 questionnaires have been distributed among actual investors (active in the country) and 107 questionnaires among potential ones; by collecting and applying Heckman two-step model, we analyzed them. Uusing Heckman two-step model was necessary because factors influencing potential investors’ behaviors to come or not to Iran were not necessarily the same as the factors influencing the amount of investment inflows by actual investors. Accordingly, in this article, the soft dimension of business environment (encompassing incertitude due to Political Instability, Xenophobia, ...) is differentiated from its hard dimension (encompassing Bureaucratic Environment, Government Executive Inability, ...) which can influance on the way that these dimensions impact on investor’s behavior. The results indicate that while in deciding to come to Iran, the investors only consider the soft dimension and its decisive importance, policy making in the field of Foreign Direct Investment (FDI ) are concentrated only on hard dimensions of the matter. For investors, deciding to enter Iran, the soft dimension is important to them, not the hard dimension, but after entering the country, hard dimensions also becomes important, so that if the country's status is suitable in terms of hard dimensions, actual investors will be more motivated to develop their business and bring more capital in to the country. Improperly prioritizes issues that the investors face, can be one of the failure factors of current policy making to attract real investors.
Masoud Derakhshan
Abstract
This paper examines critically the contributions of Cournot, Jevons and Walras as the founders of classical mathematical economics from a methodological standpoint. Advances in different economic schools and doctrines in the 19th century produced an environment of multi-dimensionality in economic analysis ...
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This paper examines critically the contributions of Cournot, Jevons and Walras as the founders of classical mathematical economics from a methodological standpoint. Advances in different economic schools and doctrines in the 19th century produced an environment of multi-dimensionality in economic analysis which was regarded by the pioneers of classical mathematical economists as a chaotic state. We have demonstrated that the formation of this new discipline, known equivalently as pure or scientific economics, was a response to this so-called chaotic state. We have also shown that the erroneous logic of abstraction in the sense of reducing a multi-dimensional economic system to a one-dimensional mechanical framework as the methodological basis of classical mathematical economics has been the origin of serious shortcomings in mathematical treatment of economics. Based on the writings of Jevons and Walras we have provided evidences to support the claim that advances in Marxian economics can be considered as the prime motive in the development of classical mathematical economics.
Rana Asghari; Hassan Heidari; S. Jamaledin Mohseni Zonouzi
Abstract
This paper investigates the impact of government size on economic growth in selected economies of the MENA countries by using a non-linear panel data approach over the period 1990-2011. The estimation results of Panel Smooth Threshold Regression model show that when the level of government consumption ...
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This paper investigates the impact of government size on economic growth in selected economies of the MENA countries by using a non-linear panel data approach over the period 1990-2011. The estimation results of Panel Smooth Threshold Regression model show that when the level of government consumption is very large, the positive impact of labor force on growth is intensified. On the other hand, export revenues in the countries under investigation have no positive effect on economic growth when the level of government consumption is high. The main result of this study confirms the negative impact of consumption expenditures on economic growth in this block of countries.
Marjan Radnia; Mosayeb Pahlavani; Mohammad Nabi Shaihaki Tash; Reza Roshan
Abstract
In this paper it has been attempted to investigate the capability of the consumption-based capital asset pricing model (CCAPM), using the general method of moment (GMM), with regard to the Epstien-zin recursive preferences model for Iran's capital market. Generally speaking, recursive utility permits ...
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In this paper it has been attempted to investigate the capability of the consumption-based capital asset pricing model (CCAPM), using the general method of moment (GMM), with regard to the Epstien-zin recursive preferences model for Iran's capital market. Generally speaking, recursive utility permits disentangling of the two psychologically separate concepts of risk aversion and elasticity of intertemporal substitution which are constrained to be equal to the inverse of each other for the traditional time-additive utility functions. Rather than using the stock market as a proxy for wealth, we constructed a more comprehensive return which is the weighted average of stock index return, labor wage growth (as a proxy for human capital return), housing return and deposit return. The empirical results demonstrate that the signs of the coefficient of the relative risk aversion and the intertemporal elasticity of substitution are the same, which means that investors have homogeneous attitudes toward the risk across the states of nature and the risk over time in Iran but different ones in their values. Therefore, the assumption that the relative risk aversion is equal to the reciprocal of the elasticity of substitution is not valid in Iran's stock market.
Ali Hussein Samadi; Ali Hussein Ostadzad
Abstract
Abstract The main purpose of this paper is to obtain the optimal amount of expenses of government relating to the protection of property rights (PPRs). To achieve these purposes we have introduced concept of social intelligence with respect to PPRs and then developed different growth model from existing ...
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Abstract The main purpose of this paper is to obtain the optimal amount of expenses of government relating to the protection of property rights (PPRs). To achieve these purposes we have introduced concept of social intelligence with respect to PPRs and then developed different growth model from existing literature. In the second step the optimal share of government spending on the PPRs is calculated. The theoretical results show inverse relationship between budget deficits and government spending in the PPRs. In other words, with increasing amount of government deficit, government reduced spending of PPRs. The results of calibration for Iranian economy show that, the growth rate of spending to PPRs should be equal to 31 percent for having sustainable economic growth rate of 6 percent.
Mohammad Ali Feizpour; Mahvash Moradi
Abstract
The link between location features and the propensity to start a new firm is a subject that did not get much attention in Iran until recently. This paper is the first attempt on this proposition and is concerned with deliberating the effect of demographical and industrial characteristics of location ...
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The link between location features and the propensity to start a new firm is a subject that did not get much attention in Iran until recently. This paper is the first attempt on this proposition and is concerned with deliberating the effect of demographical and industrial characteristics of location on start-up rates in Iranian manufacturing industries. To fulfill this aim, regional panel data based on Iranian provinces during 2002-2006 is used. Having employed the GLS method, the results of this paper show that demographical characteristics have a significant effect on new firm formation. Furthermore, we find considerable evidence suggesting that central regions succeeded in increasing the level of start-ups during the period under inspection. In addition, birth rates are greater in regions where GDP growth, security, and urbanization are high and experience abatement in regions with high minimum efficient scale and unemployment. The results of this paper can be considered as the basis of a policy that aims to promote development in borderland provinces. The government could also provide entrepreneurs with incentives to encourage them to create new firms and businesses in these regions.
Parisa Mohajeri
Abstract
The main aim of the present paper is to measure the potential value-added tax (VAT) capacity in Iran using the multiregional input-output model (MIOM) to answer the following question: “how much indirect value-added tax is potentially generated in one region in order to satisfy the production of ...
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The main aim of the present paper is to measure the potential value-added tax (VAT) capacity in Iran using the multiregional input-output model (MIOM) to answer the following question: “how much indirect value-added tax is potentially generated in one region in order to satisfy the production of other regions?” Applying Leontief’s final demand-to-output is not suitable and therefore, Pasinetti’s parsimonious production-to-production approach is utilized. For this purpose, we have used a MIOM covering 9 regions for the year 2016. Based on the existing conventional regional theory, we expect that larger regions have a tendency to contribute more value-added to other regions. Surprisingly, the overall results confirm the prevailing theory as follows: for example, region 6 (the largest region) generates 5.3% of the total value added of region 1, whereas region 7 (the smallest region) is responsible for 1.7% of the total value added of region 1. Similar results have been found on the impact of regions 6 and 7 on the added value of other regions. In addition, based on the logic of VAT system, it is expected that a larger region has a higher impact on VAT capacity in other regions. The overall findings relatively confirm the theoretical prediction as follows: the impact of region 6 on VAT capacity of other regions is 4-12 times more than the impact of the smallest region on the potential VAT capacity of other regions.
