Public Economics
Ebrahim Rezaei
Abstract
Assessing the recent decade’s literature outlines that, advanced economies mainly employed temporary tax incentives to spur economic activities after 2007-2008 economic crisis whereas developing countries use broadly them as a normal as well as a permanent fiscal policy to intrigue economy. Among ...
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Assessing the recent decade’s literature outlines that, advanced economies mainly employed temporary tax incentives to spur economic activities after 2007-2008 economic crisis whereas developing countries use broadly them as a normal as well as a permanent fiscal policy to intrigue economy. Among latter group, Iran’s fiscal authorities have been using quite an extensive diversity of tax incentives to boost real sector variables such as investment, capital accumulation and output for a long-term period. The methodology is based on the simulating a partial as well as a general equilibrium model. Benefiting from a New Keynesian general equilibrium (NKGE) model, in this research, the comprehensive effects of tax allowances, accelerated depreciation, and tax reduction on the macroeconomic variables (investment, capital, output and consumption) and fiscal measures (government revenues and the present value of the government revenue) have been evaluated. Our findings reveal that, based on the assumption of flexible wages and prices, running tax incentives policy would culminate to considerable budget deficit followed by an unsustainable fiscal stance in the economy. However, imposing nominal rigidities by their special mechanisms brings about positive effects of tax incentives and relatively fiscal sustainability. In other words, introducing rigidities in wages and prices causes positive reactions of mentioned macro and fiscal variables.
Public Economics
Ramin Amani; Saman Ghaderi; Khaled Ahmadzadeh
Abstract
Covid-19 has affected the world’s economy since 2019. The coronavirus pandemic is one of the most severe and dangerous problems that humanity has faced in the last century. Therefore, this paper aims to investigate the impact of Covid-19 on the inflation rate in the 36 OECD member countries. Monthly ...
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Covid-19 has affected the world’s economy since 2019. The coronavirus pandemic is one of the most severe and dangerous problems that humanity has faced in the last century. Therefore, this paper aims to investigate the impact of Covid-19 on the inflation rate in the 36 OECD member countries. Monthly data on Covid-19 and the inflation rate from February 2020 to August 2021 and the quantile panel regression method have been used to achieve this purpose. The results show that new cases of Covid-19 decrease the inflation rate in all quantiles, which means that by increasing the number of Covid-19 cases, economic activities decrease because of the business restrictions. Moreover, the new deaths of Covid-19 have a dual impact on the inflation rate in OECD countries. With increasing in Covid-19 deaths, business restrictions have increased, the economy has entered a recession, and inflation has decreased. On the other hand, the growth of Covid-19 casualties could increase economic uncertainty and inflation. Furthermore, Covid-19 vaccinations have positive and significant effects on the inflation rate in OECD countries. Accordingly, policymakers are advised to include increasing vaccine injections, especially booster doses, to increase economic activity and prosperity in OECD and world economies. Furthermore, Covid-19 showed the necessity of preparing the world against infectious diseases in the future.
Public Economics
Naser Olfati; Mahbubeh Delfan; Mohamad Alizadeh; Sohrab Delangizan
Abstract
the purpose of this study is to investigate the effects and consequences of financial policy instruments on macroeconomic variables according to their usage .in order to provide a comprehensive analysis of the above - mentioned works , a dynamic open dynamic general equilibrium model with respect to ...
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the purpose of this study is to investigate the effects and consequences of financial policy instruments on macroeconomic variables according to their usage .in order to provide a comprehensive analysis of the above - mentioned works , a dynamic open dynamic general equilibrium model with respect to the household , agency , government , and central bank is designed to fit the characteristics of iranian economy in which households are considered as two categories : Ricardo and nonRicardo .in the financial sector , government expenditures have been divided into three parts : cost of goods , public goods and construction costs and also government tax revenues as financial instruments are divided into three categories : tax rate tax rate , tax rate and tax rate on capital .the structural parameters of the model were estimated using seasonal data of 1399 - 1383 .the results of the model simulation show that the increase of a tax rate in order to finance government expenditures depends on the nature of government spending ( current or construction ) and the goal of nonpolitician so that if the goal is to provide the current expenditure and the government is willing to reduce the consumption and production costs , then it is necessary to increase the rate of tax on consumption or the rate of tax on investment .
Public Economics
Somaye Rasouli Firoozabadi; Nazar Dahmarde Ghaleno; Mohammad Nabi SHahiki Tash
Abstract
The primary objective of the present article is to study the impact of positive shocks in government expenditures during different financial periods on economic variables in Iran. To this end, first, financial condition index was created through principal components analysis. Then, using LR non-linear ...
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The primary objective of the present article is to study the impact of positive shocks in government expenditures during different financial periods on economic variables in Iran. To this end, first, financial condition index was created through principal components analysis. Then, using LR non-linear test and the data related to the period of 2005 to 2018, while studying non-linearity, the value of the variable threshold variable is estimated exogenously. Therefore, the value of the threshold of financial index is considered to be -0.36. Threshold Vector Autoregression Model (TVAR) with the assumption of the possibility of regime switching and generalized impulse-response functions are extracted to examine the impact of positive and negative shocks in government expenditures. Based on the results, the reaction of economic variables to positive shocks in government expenditures will be independent from financial periods whereas the reaction to negative shocks in government expenditures is influenced by financial periods, especially the period of recession. financial sector cannot improve real sector due to structural problems. increasing government authority, lack of competition space between public and private sector, allocating inefficient government spending have caused that financial sector cannot significant effect on economic real sector such as economic growth And in some cases we will see the negative impact of this sector.
Public Economics
Fatemeh Etemedmoghaddam; Majid Sameti; Sara Ghobadi; Mansour Mahinizadeh
Abstract
In an effort to achieve economic growth and development, to eliminate or minimize the traditional barriers of trade, trade facilitation (TF), and increase international trade, free trade zones in Iran were founded. In this regard, part of the solution to increasing countries' international trade is provided ...
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In an effort to achieve economic growth and development, to eliminate or minimize the traditional barriers of trade, trade facilitation (TF), and increase international trade, free trade zones in Iran were founded. In this regard, part of the solution to increasing countries' international trade is provided by Public- Private Partnerships. Since trade facilitation includes a relationship between the Public and Private sectors, this type of partnership is especially important in trade facilitation. The purpose of this research is to evaluate the relationship of the factors that have the greatest impact on TF-oriented PPPs in the free zones and these factors derive from the theory of PPPs. Qualitative data was collected focusing on private, public, and academic sector professionals involved in free zones and trade by a researcher-made questionnaire. The Structural Equation Modeling (SEM) strategy was utilized to look at the model and test the research hypotheses. Of the 5-hypothesis proposed by this study, four hypotheses were confirmed and one was rejected. The results have shown that the variables of private sector abilities, the micro-environment factors, and the macro-environment factors, in that arrange, have the foremost impact on TF-oriented PPPs and TF-oriented PPPs have a strong relationship to trade facilitation. Therefore, the use of TF-oriented PPPs in free zones can have a positive effect on trade facilitation, and the development of TF dimensions will also lead to trade facilitation in Iran's free zones.
Public Economics
Shahryar Zaroki; Mastaneh Yadollahi Otaghsara
Abstract
This study investigates the effects of real minimum wage on informal employment in rural and urban areas of provinces of Iran between 2005 and 2018. For this aim, by applying microdata on the income-expenditure plan of urban and rural households and with the aid of the minimum wage index, the ratio of ...
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This study investigates the effects of real minimum wage on informal employment in rural and urban areas of provinces of Iran between 2005 and 2018. For this aim, by applying microdata on the income-expenditure plan of urban and rural households and with the aid of the minimum wage index, the ratio of informal employment to total employment was calculated. Preliminary data analysis shows that one-third of urban employees and more than half of rural employees are engaged in informal occupations during this period. Then, the research model was estimated using the panel data method. Estimating the random effects model shows that the real minimum wage and tax burden positively affect informal employment in urban areas. In rural areas, the estimation using the Fixed effects method (and FGLS estimator) shows that real minimum wage, tax burden, and Gini coefficient positively affect informal employment. Furthermore, the interactive effect coefficient of real minimum wage considering the unemployment rate illustrates that in urban areas, the increase of unemployment rate increases the positive effect of real minimum wage. In rural areas, the increasing unemployment rate reduces the positive effect of the real minimum wage
Public Economics
Elham Khorasani Kordeh Koohi; Reza Najarzadeh
Abstract
Wagner's Law states that the relative size of public sector increases with the growth of per capita income. This study examines whether there is empirical evidence that Wagner’s law holds in the Iranian economy using time series annual data over the period 1985-2018 in Iran, applying cointegration ...
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Wagner's Law states that the relative size of public sector increases with the growth of per capita income. This study examines whether there is empirical evidence that Wagner’s law holds in the Iranian economy using time series annual data over the period 1985-2018 in Iran, applying cointegration and vector error correction modelling (VECM) techniques. In particular, this study provides a special focus on examining the validity of the versions of Wagner’s hypothesis, which supports the existence of long-run relationship between public expenditure and economic growth. The results of the estimates demonstrate that this law holds in Iran. The elasticity of the government expenditures with respect to national income must be greater than one for the Wagner’s law to hold. However, government’s spending on health and education has been less than expected. Therefore, considering all the government’s spending, Wagner's law is valid in Iran. On the other hand, by examining government expenditures in health and education sector as the most important part of the government expenditures, it is seen that the revenue elasticity of government expenditures in the health and education sectors is less than one. Accordingly, our estimates for Iran do not confirm this law. Although the absolute size of the public sector grows when the income increases, its rate of growth in these sectors is substantially lower than the growth of income. This could suggest that the government does not pay enough attention to health and education sectors and that these are not priorities of the government.
Public Economics
Rezgar Feizi; Sahar Amidi; Khaled Ahmadzadeh; Bakhtiar Javaheri
Abstract
The exchange rate and international oil price are key variables to cause the effects of external shock on economics and the relationship to domestic economy. Since in countries like Iran, most government revenues come from exchange earnings from the international markets by oil exports, the impact of ...
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The exchange rate and international oil price are key variables to cause the effects of external shock on economics and the relationship to domestic economy. Since in countries like Iran, most government revenues come from exchange earnings from the international markets by oil exports, the impact of these two variables on the economy has significant consequences. In addition, it should be considered how fluctuations in the exchange rate and international oil prices can impact policy and international relations. According to the international trade perspective, it is believed that the exchange rate affects the economy through the changes in exports and imports commodities; therefore, expectations of the exchange rate will affect the price of the products traded. Moreover, the impact of oil price on the production of commodities changes the level of supply for activities and income of institutions through changes in the production factors and intermediary imports price. We conclude that if any change in both exchange rate and oil prices occurs, it will cause a change in welfare indicators. This research has therefore arisen to fill this void in the literature. Moreover, it utilizes a logistic model to represent the change in the exchange rate and oil price. Based on empirical results, a recursive computable general equilibrium model is constructed to predict future social welfare and simulate the impact of exchange rate fluctuations along with the oil price shock. The results are presented in different scenarios using the 2011 Social Accounting Matrix (SAM).
