Malihe Ashena; Hossein Sadeqi; Ghazal Shahpari
Abstract
Improving energy efficiency is one of the most important energy policies in many countries. This study mainly focused on the economic and environmental effects of energy efficiency improvements in Iran’s electricity sector on Iran’s economy using a computable general equilibrium framework. ...
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Improving energy efficiency is one of the most important energy policies in many countries. This study mainly focused on the economic and environmental effects of energy efficiency improvements in Iran’s electricity sector on Iran’s economy using a computable general equilibrium framework. Furthermore, the potential benefits of carbon reduction were explored. The results showed that the most significant change occurred in the sectoral output. Other macroeconomic variables, such as GDP and export, also showed higher levels. Accordingly, it can be asserted that a combination of energy policies, such as carbon pricing and revenue recycling, that are aimed at improving energy efficiency can potentially have positive effects on both the economy and the environment. Therefore, energy efficiency improvements can be considered a cost-effective alternative to promoting sustainable development.
International Economics
Parisa Mohajeri; Ali Asghar Banouei
Abstract
Traditional trade theories and/or “Trade-in-Goods” predict that exports can generate 100% value-added which has recently been debated by Trade-in-Tasks theories. The root of these debates are referred to the existing conventional macro-economic accounting, which is expressed that expenditure ...
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Traditional trade theories and/or “Trade-in-Goods” predict that exports can generate 100% value-added which has recently been debated by Trade-in-Tasks theories. The root of these debates are referred to the existing conventional macro-economic accounting, which is expressed that expenditure components of final goods including gross exports (GE) equals to total value is consumed in each country. It means that a country’s GDP is the sum of its domestic final demand including GE. Generating 100% value added in domestic final demand may hold true but GE due to double counting may not generated 100% value added for the domestic economy. In addition to that domestic value added (DVA) has a nice property with Vertical Specialization (VS) in such a way that the sum of their shares are equal to one and therefore, can measure the degree of VS in trade. In this article, we take this issue as a starting point and for the first time try to analyze it with the following questions: What amount of DVA should be attributed to GE from Iran? What is the relationship between DVA and VS? We apply two methods of Hypothetical Extraction (HEM) and VS. Using the latest Input-Output Tables (IOTs) of 2011 and 2001 in Iran. The overall findings are as follows: One- the share of DVA in GE in 2001 is 95.02%, downs to 93.33% in 2011 and the shares of residual as an overestimation of GE are 4.98% and 6.67% for each year respectively. Second there is an inverse relationship between DVA and VS shares for both years. Third- the considerable large shares of DVA followed by small shares of VS suggest that Iranian economy is at the beginning of production chains with non-symmetric trade pattern.
Macroeconomics
Ali Hojati; Mohammad Hossein Rahmati
Abstract
There is a vast line of research in misallocation like Hsieh and Klenow (2009), which see its roots in policy distortions. However, papers like Bill, Klenow, and Ruane(2020) argued differences in measured average products might reflect misspecification instead of actual marginal products. By focusing ...
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There is a vast line of research in misallocation like Hsieh and Klenow (2009), which see its roots in policy distortions. However, papers like Bill, Klenow, and Ruane(2020) argued differences in measured average products might reflect misspecification instead of actual marginal products. By focusing on the Indian and Chinese manufacturing sectors, this paper shows that these results are sensitive to the parameters of the factor accumulation and the production function. Notably, the optimal dispersion depends on the parametrization, so one can't address the misallocation without a country-specific calibration of the model, we observe that the Hsieh and Klenow (2009) results are highly dependent on the measurement of the elasticity of substitution and capital share in production. Therefore, the assumption of the same parameters for all three countries could misguide us to a wrong measurement of the actual effects of misallocation. So we need to focus on the estimation of production function before any calculation on misallocation.
Zahra Elmi; Omid Ranjbar
Abstract
Abstract In this paper, income per capita convergence hypothesis is tested in selected OIC countries. For this purpose, we use the time series model and univariate KPSS stationary test with multiple structural breaks (Carrion-i-Silvestre et al. (2005)) over the period 1950-2008. The results show that ...
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Abstract In this paper, income per capita convergence hypothesis is tested in selected OIC countries. For this purpose, we use the time series model and univariate KPSS stationary test with multiple structural breaks (Carrion-i-Silvestre et al. (2005)) over the period 1950-2008. The results show that most OIC countries could not catch up toward USA. Although because of some positive term of trade shocks, they experienced catching up process in some sub- periods, they did not have appropriate infrastructure as, they could not use these opportunities and escape lag deadlock.
Hassan Daliri; Nader Mehrgan
Abstract
The recent financial crisis has raised several questions with respect to the financial institutions and banking industry. Hence, over the last decade the Iranian banking industry has undergone many substantial changes, such as liberalization, government regulation and technological advances. What impacts ...
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The recent financial crisis has raised several questions with respect to the financial institutions and banking industry. Hence, over the last decade the Iranian banking industry has undergone many substantial changes, such as liberalization, government regulation and technological advances. What impacts do these changes have on the policy instruments? We have answered this question in this study. To do this, we used the DSGE models. We also used two kinds of basic DSGE structures: External Finance Premium (EFP) Model and Collateral Constraint (CC) Model. Both models are simulated for Iran. Finally, we have examined the effects of monetary shocks for each model variables. We employed a Bayesian method to estimate the parameters of DSGE models. We have concluded that the prediction power of the EFP models is better than that of CC model. In addition, the results showed that the increase in liquidity raises output, inflation, investment and consumption. Moreover, it was found that the responses of variables to monetary policy in the CC model was greater than of the EFP model.
Ahmad Sadraei Javaheri; Ali Hussein Ostadzad
Abstract
This paper aims at estimating the efficiency of hydroelectric power plants (renewable energy resources) and thermal power plant (non-renewable energy resources) in Iranian provinces. Data Envelopment Analysis (DEA) approaches is applied to estimate the efficiency. The network is modeled as a linear system ...
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This paper aims at estimating the efficiency of hydroelectric power plants (renewable energy resources) and thermal power plant (non-renewable energy resources) in Iranian provinces. Data Envelopment Analysis (DEA) approaches is applied to estimate the efficiency. The network is modeled as a linear system with multiple inputs and one output. Fuel cost, labor force, operation cost are used as inputs. Electrical energy delivered per year is used in the model as output. The study offers some detailed policies to improve the efficiency of the plants. Mean technical efficiency of hydroelectric power plant in 2011 and 2010 are 62% and 53%, respectively. Mean technical efficiency of thermal power plant in 2011 and 2010 is 82% and 77%, respectively. The results of the study indicate that mean technical efficiency of thermal power plant in 2010 and 2011 is higher than efficiency of hydroelectric power plants.
Mohammad Nabi Shahiki Tash; Forough Jahantigh
Abstract
This paper studies the effects of the structural variables of the Iranian industries sector on the welfare cost using to the Structure-Conduct-Performance (SCP) theory. In other words, we investigate the role of structural components and their effects on the size of the welfare cost in Iran's industry ...
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This paper studies the effects of the structural variables of the Iranian industries sector on the welfare cost using to the Structure-Conduct-Performance (SCP) theory. In other words, we investigate the role of structural components and their effects on the size of the welfare cost in Iran's industry sector. We have used the Leibenstein's model to calculate the deadweight loss and then the panel data model has been used to quantify the model. Leibenstein believed that in many cases the monopolistic industries operate inefficiently due to being on the margin of safety. So in addition to the welfare triangle, the costs of the inefficiency of monopolistic industries should be also considered as the welfare cost. Our results demonstrate that there is a direct relationship between the welfare cost and all of the parameters of the model (barriers to entry, market concentration, economies of scale, state ownership share and firm size).
Amir T. Payandeh Najafabadi; Marjan Qazvini; Reza Ofoghi
Abstract
There are several researches that deal with the behavior of SEs and their relationships with different economical factors. These range from papers dealing with this subject through econometrical procedures to statistical methods known as copula. This article considers the impact of oil and gold price ...
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There are several researches that deal with the behavior of SEs and their relationships with different economical factors. These range from papers dealing with this subject through econometrical procedures to statistical methods known as copula. This article considers the impact of oil and gold price on Tehran Stock Exchange market (TSE). Oil and gold are two factors that are essential for the economy of Iran and their price are determined in the global market. The model used in this study is ARIMA-Copula. We used data from January 1998 to January 2011 as training data to find the appropriate model. The cross validation of model is measured by data from January 2011 to June 2011. We conclude that: (i) there is no significant direct relationship between gold price and the TSE index, but the TSE is indirectly influenced by gold price through other factors such as oil; and (ii) the TSE is not independent of the volatility in oil price and Clayton copula can describe such dependence structure between TSE and the oil price. Based on the property of Clayton copula, which has lower tail dependency, as the oil price drops, stock index falls. This means that decrease in oil price has an adverse effect on Iranian economy.
Abstract
We have introduced an early warning system for volatility regimes regarding Tehran Stock Exchange using Markov Switching GARCH approach. We have examined whether Tehran Stock Market has calmed down or more specifically, whether the surge in volatility during 2007-2010 global financial crises still affects ...
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We have introduced an early warning system for volatility regimes regarding Tehran Stock Exchange using Markov Switching GARCH approach. We have examined whether Tehran Stock Market has calmed down or more specifically, whether the surge in volatility during 2007-2010 global financial crises still affects stock return volatility in Iran. Doing so, we have used a regime switching GARCH model. The data consist of 3067 daily observations of the closing value of the Tehran stock market from 29/09/1997 to 09/09/2010. The results indicate that during the crisis period, Tehran stock exchange was in the high-volatility regime. Smoothed probability plots show that the volatility in 2007-2009 was in high volatility regime but at 2009-2010, Volatility turned to low volatility regime. Also, we have introduced an early warning system for forecasting high volatility in Tehran Stock Exchange
Mohammad Bakhshoodeh
Abstract
In this paper I develop a Proxy Means Tests (PMT) model and examine several targeting lines based on 2008 household survey data to identify beneficiaries for a targeting subsidy scheme in Iran. Based on the findings of this study, setting a cut-off percentile of 40% is expected to provide compensation ...
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In this paper I develop a Proxy Means Tests (PMT) model and examine several targeting lines based on 2008 household survey data to identify beneficiaries for a targeting subsidy scheme in Iran. Based on the findings of this study, setting a cut-off percentile of 40% is expected to provide compensation for almost 70 percent of the poorest households. This will result in the highest accuracy mainly in rural areas where poverty is much more severe than elsewhere in the country. Substituting the current scheme which covers almost all households in Iran with a targeting scheme based on the results of the PMT model will allow for either transferring larger amount of money to the extreme poor at the current budget, or reducing the government expenditure in the form of repayment after removing subsidies on fuel and energy.
Iman Bastanifar; Mohammad Vaez Barzani
Abstract
Monetary policy rule might be helpful to avoid the problem of time inconsistency provided there is a commitment to the rule. The commitment is the ability of a government to bind future policies. However, it doesn’t include intrinsic motivations. Therefore, hegemony, which includes both intrinsic ...
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Monetary policy rule might be helpful to avoid the problem of time inconsistency provided there is a commitment to the rule. The commitment is the ability of a government to bind future policies. However, it doesn’t include intrinsic motivations. Therefore, hegemony, which includes both intrinsic and extrinsic motivations, better solves the problem of time inconsistency. In this paper, we explain the nature of hegemony and discuss why hegemony is preferred to commitment. We have used an index of hegemony to evaluate monetary policy and estimate the hegemony of Supervisory Packages on Monetary Policy (SPMP) of Islamic Republic of Iran for the period 2008-2011 by using fuzzy logic. The results show that an optimal hegemonic policy is better than the optimal commitment policy if and only if adjusted total effect of intrinsic motivation on an agreed-upon social objective function is positive. The results show that the hegemony index of central bank which consists of a combination of three sub-indexes such as "regional equity", "commitment ordering" and "diversity of economic activities" is relatively low and needs to be increased to ensure economic stability.
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.
Mohammad Ali Feizpour; Mansoor Mahinizadeh; Kazem Yavari; Iman Shaker Ardakany
Abstract
Industrial subsidy is one of the important tools in support of the national production that plays a crucial role in the realization of a resilient economy. Regarding limited financial resources, it is important to determine how these subsidies can be distributed efficiently. Accordingly, the purpose ...
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Industrial subsidy is one of the important tools in support of the national production that plays a crucial role in the realization of a resilient economy. Regarding limited financial resources, it is important to determine how these subsidies can be distributed efficiently. Accordingly, the purpose of this study is to provide a model for allocating industrial subsidy among 22 manufacturing industries at the level of 2-digit ISIC codes using the ZSG-DEA model based on the merging of the concepts of game theory with the DEA, and also four effective criteria in allocating public resources namely, industrial added value, the number of industrial employees, the amount of direct export and the amount of industrial taxes and duties. The results of the study show that the food and beverage industry should receive the highest proportion of the optimum subsidy, whereas industries related to manufacturing office machines, accounting and computing machinery, radio, television, communication devices, wearing apparel, tanning and polishing leather and leather goods, fur, and manufacturing tobacco products should receive the lowest proportion of industrial subsidies.
Ali Faridzad; Ali Asghar Banouei
Abstract
The present study is to indicate that the comparison between sectoral production multipliers of an input-output (I/O) model and a social accounting matrix (SAM) framework is almost impossible without taking into account accounting balances and theoretical considerations. Theoretically, the I/O model ...
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The present study is to indicate that the comparison between sectoral production multipliers of an input-output (I/O) model and a social accounting matrix (SAM) framework is almost impossible without taking into account accounting balances and theoretical considerations. Theoretically, the I/O model provides the Leontief’s production function, on the basis of which sectoral output multiplier can be derived. In a SAM, however, the combined Leontief-Keynes models dominate multipliers commonly known as accounting multiplier matrices. The inter-industry blocks of these matrices cannot be called sectoral output multipliers as in an I/O model, rather they are known as sectoral supply multipliers. Therefore, the two sectoral multipliers are of different nature and cannot be compared for assessing sectoral performance and sectoral policy analysis of the key sectors. In the light of these evidence, this important question can be posed that whether it is possible to compare sectoral multipliers of the two approaches or not? To investigate this, two databases were used, namely the conventional I/O tables and SAM. The data for both sets of tables, prepared by the Research Center of the Islamic Parliament for the year 2011, were aggregated into 21×21 sectors. The overall results indicated that sectoral output multipliers of a conventional I/O model grossly overestimated multipliers of key sectors while sectoral supply multipliers of a conventional SAM underestimated multipliers of the key sectors. To solve the problem and make sectoral multipliers of the two approaches comparable, deduction of imports has been proposed. The overall findings showed that sectoral output multipliers of a conventional I/O model were overestimated about 1.284 unit on average and sectoral supply multipliers of a conventional SAM were underestimated about 1.245 unit on average. Considering the domestic I/O model and SAM, however, it was observed that sectoral output multipliers is on an average 1.202 in domestic IOM whereas in domestic SAM sectoral output multipliers is on an average 1.237. Consequently, the two approaches were comparable in sectoral policy analysis.
Mohammad Sayadi; Meysam Omidi
Abstract
This study applied a prediction-based portfolio optimization model to explore the results of portfolio predicament in the Tehran Stock Exchange. To this aim, first, the data mining approach was used to predict the petroleum products and chemical industry using clustering stock market data. Then, some ...
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This study applied a prediction-based portfolio optimization model to explore the results of portfolio predicament in the Tehran Stock Exchange. To this aim, first, the data mining approach was used to predict the petroleum products and chemical industry using clustering stock market data. Then, some effective factors, such as crude oil price, exchange rate, global interest rate, gold price, and S&P 500 index, were used to estimate each industry index using Radial Basis Function and Multi-Layer Perceptron neural networks. Finally, by comparing the validation ratios in a bullish market using K-Means, SOM, and Fuzzy C-means clustering algorithms, the best algorithm was employed to predict indicators for each industry. The sample was collected between December 15, 2008, and April 25, 2018. The results revealed that the Multi-Layer Perceptron algorithm had the highest accuracy and was the best option for portfolio predicament. However, the Fuzzy C-means algorithm produced the best clusters. Practical results showed that Sepahan oil and Kharg petrochemical stocks were the most important stocks in the short term while Kharg petrochemical, Fannavaran petrochemical, and Tehran oil refinery stocks made higher contributions in a stock portfolio in the medium- or long-term.
Other
Mohamamd Feghhi Kashani; Ahmadreza Mohebimajd
Abstract
Although theories over portfolio speculation have made remarkable progress so far, the performance of its proposed portfolios depends largely on the degree of accuracy in predicting future stocks prices dynamics. This study focuses on improving the performance of optimal portfolios by modeling the stocks ...
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Although theories over portfolio speculation have made remarkable progress so far, the performance of its proposed portfolios depends largely on the degree of accuracy in predicting future stocks prices dynamics. This study focuses on improving the performance of optimal portfolios by modeling the stocks prices dynamics through a time-inconsistent multivariate diffusion specification with drift vector. To this end, the share prices are simulated by means of a semi-martingale process with time inconsistent (local) martingale and information drift parts over the entire optimization horizon. Then, using the results of price simulation, we have looked into its consequences for constructing the portfolio of assets in the framework of Sharpe ratio maximization method and mean-variance analysis. Findings indicate that for the stock market under study (Tehran) within the trading dates spanning the interval 24-Mar-2001 to 19-Sep-2020, return and risk (standard deviation) of the portfolios obtained from applying this simulation scheme for mean-variance analysis and maximization of Sharpe ratio are both respectively higher and lower than those realized by the conventional methods. Additionally, a comparison of the simulation approach with performance of the actual market portfolios indicates that the Sharpe ratios of the simulation method is higher than those resulting from the market portfolios.
Parisa Mohajeri; Reza Taleblou; Aylar Rahnama
Abstract
Based on the theory of market timing in the framework of capital structure, the time of issuing stock depends on the stock prices. In that way, managers are issuing shares that have a high ratio of market value to book value. In fact, issuing shares is in the best interest of the firm when the company's ...
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Based on the theory of market timing in the framework of capital structure, the time of issuing stock depends on the stock prices. In that way, managers are issuing shares that have a high ratio of market value to book value. In fact, issuing shares is in the best interest of the firm when the company's stock in the market is more than actually valued. In this paper, by using panel data of 55 firms listed in the Tehran Stock Market during the 2003 to 2018, we investigate the impact of market timing on capital structure. The estimated model in this paper is a partial dynamic model using the Generalized Method of Moment (GMM) and Arrelano-Band Estimates. The findings indicate that: one- market timing has affected the firm`s capital structure of Tehran Stock Exchange.Two- market condition has a significant negative effect on capital structure which means that in the hot markets, managers issue more equity and less debt. Three- firm size and tangible assets have significant positive effects on leverage ratio. In fact, the larger firms with more tangible assets face lower default risks, thus they have relatively more debt. Four- profitability variable influences corporate leverage negatively. Five-sanction and exchange rate variables have negative significant effects on capital structure.
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.
Ramezan Hosseinzadeh; Nooraddin Sharify
Abstract
In this study, the Input- Output Structural Decomposition Analysis (I-O SDA) is used to investigate the effects of technological structure changes on changes of total output in Sistan and Baluchestan Province during 2006-2011. The technological structure change is decomposed into two factors: intermediate ...
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In this study, the Input- Output Structural Decomposition Analysis (I-O SDA) is used to investigate the effects of technological structure changes on changes of total output in Sistan and Baluchestan Province during 2006-2011. The technological structure change is decomposed into two factors: intermediate input structure changes (input substitution) and change in direct backward linkage. The results show that the effect of changes in direct backward linkage is negative in all sectors, but the effect of input substitution in twelve sectors is positive and in other nine sectors is negative. Input substitutions in "Agriculture" and "Transport" sectors have the main positive effect on total output of the region and in ''Food industries'' and ''Restaurants & Hotels'' have the main negative effect on total output. This factor caused 20.89 billion Rials decrease in total output of region. Changes in direct backward linkage caused 8270.89 billion Rials decrease in total output of the region.
Ali Hussein Samadi; Sara Togha
Abstract
Entrepreneurship is influenced by many factors and environments such as institutions. Institutions have an important role to play in the individual's tendency toward necessity and opportunity entrepreneurship. The purpose of this paper was to examine the impact of institutional quality (property rights) ...
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Entrepreneurship is influenced by many factors and environments such as institutions. Institutions have an important role to play in the individual's tendency toward necessity and opportunity entrepreneurship. The purpose of this paper was to examine the impact of institutional quality (property rights) on opportunity and necessity entrepreneurship. The results, based on unbalanced panel data from 2005 to 2015, showed that property rights did not have a significant effect on the opportunity entrepreneurship in the factor-driven group while it had a negative impact on necessity entrepreneurship. In the efficiency-driven group, protecting property rights would provide the perfect context for opportunity entrepreneurship and reduce necessity entrepreneurship, but in the innovation-driven group, strengthening property rights increased both opportunity and necessity entrepreneurship. These results indicate that the impact of property rights on (opportunity- and necessity-) entrepreneurship depends on the level of economic development of countries.
Ahmad Jafari Samimi; Saman Ghaderi; Bahram Sanginabadi
Abstract
Abstract The purpose of this paper is to test the hypothesis first proposed by Romer (1993); suggesting that inflation is lower in more open economies. According to this hypothesis, central banks have a lower incentive to engineer surprise inflations in more-open economies because the Phillips curve ...
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Abstract The purpose of this paper is to test the hypothesis first proposed by Romer (1993); suggesting that inflation is lower in more open economies. According to this hypothesis, central banks have a lower incentive to engineer surprise inflations in more-open economies because the Phillips curve is steeper. Furthermore, Comparing with other empirical studies, this paper has used the new KOF globalization index to estimate the relationship between economic globalization and inflation. We utilized the ARDL Bounds test approach to level relationship proposed by Pesaran et al. (2001) for Iranian annual data during 1970-2009. The results from Bounds test approach confirm the existence of the long-run relationship among the variables for both spesification. The results show that openness has a negative and significant effect on inflation in short-run but its effect on inflation in long-run is positive. Globalization has a negative and significant effect on inflation in short-run and long-run. Thus, it seems that the new economic globalization (KOF index) which is a broader comprehensive index is a better proxy of openness.
Hasan Kiaee
Abstract
This paper focused on developing a model to study the effect of sukuk issuance on the inflation rate in top sukuk issuing Islamic economies at 2014. For this purpose, as the available sample size is small, a Bayesian approach to regression model is used which contains key ...
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This paper focused on developing a model to study the effect of sukuk issuance on the inflation rate in top sukuk issuing Islamic economies at 2014. For this purpose, as the available sample size is small, a Bayesian approach to regression model is used which contains key supply and demand side factors in addition to the outstanding sukuk volume as potential determinants of inflation rate. In the suggested model, inflation rate variable shows an apparent right skewness and the efficiency of log transformation for this variable is confirmed via Box-Cox approach. To give Bayesian estimators of the regression parameters, we have implemented an MCMC approach including 100,000 iterations in the WinBUGS software. The results show that sukuk volume is a significant determinant of inflation in selected Islamic countries, but only in the well-developed capital market economies its increase could decline the rate of inflation and so sukuk could be used as a policy instrument for controlling inflation. Also the Bayesian estimation of the other parameters shows that increase of money growth and exchange rate growth lead to higher inflation rates.
Majid Maddah; Azadeh Talebbeidokhti
Abstract
Abstract: The aim of international economic sanctions is imposing economic restrictions on target countries. In order to decrease the sanctions negative brunt on citizenry and make it ineffective, government may respond to sanctions through policies such as increasing the supply of public goods. This ...
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Abstract: The aim of international economic sanctions is imposing economic restrictions on target countries. In order to decrease the sanctions negative brunt on citizenry and make it ineffective, government may respond to sanctions through policies such as increasing the supply of public goods. This paper studies the regime changes of government expenditures in Iranian economy in response to economic sanctions using Markov-Switching model during period of 1978 to 2014. The results from estimated specified model indicate that firstly total, constructive and current expenditures in response to sanctions follow Markov-Switching pattern. Secondly, total, constructive and current expenditures in response to sanctions raise, and this finding confirm using public goods as defensive tool to contrast sanctions in Iran.
Energy Economics
Ebrahim Hadian; Ali Hossein Ostadzad
Abstract
The pertinent question is whether scarcity of non-renewable energy resources limits economic growth. Given that the earth's natural resources are limited, the answer appears to be yes. However, there are two reasons to reject this question. Technological advancements that conserved resources may be able ...
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The pertinent question is whether scarcity of non-renewable energy resources limits economic growth. Given that the earth's natural resources are limited, the answer appears to be yes. However, there are two reasons to reject this question. Technological advancements that conserved resources may be able to eliminate resource scarcity. Additionally, countries can import resources from other countries. This paper aims to develop an endogenous growth model with stochastic exhaustible energy resources and use it to explain the economy's steady state behavior. We consider the uncertainty associated with extractable energy resources and then develop a stochastic growth model on this basis.Additionally, we solve this model analytically using the Stochastic Hamilton-Jacobin-Bellman method (SHJB method). Finally, for the Iranian economy, we apply the analytical solution. The primary findings indicate that as natural resource extraction becomes even more uncertain, the rate of economic growth slows, which results in a subsequent decline in the rate of resource extraction. Furthermore, we observe that the variance in energy extraction in the Iranian economy is approximately 0.22. Under these conditions of uncertainty, the optimal economic growth rate in a steady state will be 7.1 percent with an extraction rate of 1.1 percent.
Seyed Reza Nakhli; Monireh Rafat; Rasul Bakhshi Dastjerdi; Meysam Rafei
Abstract
Since the nationalization of the oil industry, especially after the 1979 revolution, Iran has always encountered economic sanctions. The oil embargo and international financial sanctions are the most severe sanctions imposed on Iran and have had significant effects on Iran’s macroeconomic variables. ...
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Since the nationalization of the oil industry, especially after the 1979 revolution, Iran has always encountered economic sanctions. The oil embargo and international financial sanctions are the most severe sanctions imposed on Iran and have had significant effects on Iran’s macroeconomic variables. The current study aimed to analyze the effects of economic sanctions on Iran’s macroeconomic variables using a dynamic stochastic general equilibrium (DSGE) model based on the new Keynesianapproach. The simulation results showed that the intensification of the oil and international financial sanctions would 1) reduce foreign and government investment, technology innovation,export in the oil sector, and consequently oil production, 2) lead to a higher exchange rate and a decrease in the ratio of the central bank foreign exchange reserves to the monetary base, 3)reduce the GDP and non-oil exports and increase the inflation, which may cause stagflation, 4) increase household consumption and decrease household investment, 5) increase budget deficit, forcing the government to adopt policies to raise current expenditures and maintain housing and urban developmentbudget, which, in turn, will lead to a budget deficit and bond sales. The analysis of various optimal monetary policies in the context of economic sanctions and considering the contingent business interruption (CBI) loss function showed that the optimal simple rule, in the form of the producer price index, targeting monetary policy, could reduce the loss function and increase the importance value of output coefficient in themonetary policy.
