Majid Maddah; Mohammad Mehdi Berijanian; Mohammad Sadegh Ghazizadeh
Abstract
Environmental problems are one of the most challenging issues for the entire world and each country. In economic studies, environmental issues are analyzed as negative externalities. In this article, the negative externalities of electricity production on the output growth of different sectors and household’s ...
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Environmental problems are one of the most challenging issues for the entire world and each country. In economic studies, environmental issues are analyzed as negative externalities. In this article, the negative externalities of electricity production on the output growth of different sectors and household’s welfare in Iran’s economy have been studied through price system using Computable General Equilibrium (CGE) model empirically. In this regard, Iran’s Social Accounting Matrix of 2011 and GAMS software by introducing five scenarios related to environmental effects of electricity production have been used. The results show that firstly, the internalization of electricity production externalities reduces the output of agriculture and industry sectors in all scenarios, while the output of services will increase. Secondly, internalization of electricity production externalities increases total economy’s output and declines the household’s welfare.
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.
