Journal of Quantitative Economics
Year:2015 | Volume:11 | Issue:4 (43)|Papers Count:7

Globalization is one of the most important phenomenon over the last decades that has had substantial effect on many macroeconomic variables. In many countries, by increasing trade and financial openness, the size of government has been changed. In this study, therefore, we have investigated the effects of trade and financial openness on government size in member of the MENA countries during the period 2002-2013. Considering endogenous explanatory variables using instrumental variables and the Error Components Three-Stage Least-Squares (EC3SLS) estimator are distinguishing features of this study compared to previous studies. In accordance with the efficiency hypothesis, the findings indicate that financial openness has a negative effect on the government size. Furthermore, based on the compensation hypothesis, the results show that the trade openness has a positive effect on the government size. Generally, the results show that the positive effect of trade openness on government size is greater than the negative impact of financial openness. These findings indicate that economic globalization will lead to increase in government size in member of the MENA countries. Thus, privatization should have a more priority and government role in economy should be limited to supervising and policy-making.

In this paper, we highlight a new aspect of governments' dependency on oil revenues. The main hypothesis is that oil revenue is the most important source of tax revenues in oil countries. We examined this hypothesis using panel regression analysis and unbalanced panel data from 14 oil exporter countries over the period of 1990 to 2010. Our primary finding is that (oil and natural gas) revenue is a significant determinant of the tax revenue; i.e. each unit of oil revenues generates approximately 0.2 unit tax revenue for these governments. As a result, we can conclude that oil countries are more dependent on natural resources than they currently believe.

Economic policies have led to many environmental challenges in Iran during last decades. Reform of energy carrier prices, is one of the government's economic policies that have had important economic and environmental effects. In this study, using Robust least squares method (RLS), we have examined the effect of changes in the fuel price (Gasoline and Diesel fuel) on greenhouse gas emissions in the road transport sector during the period of 1991 to 2013. To do that, we have separated emission of cars, buses, minibuses, trucks and tractors. The results show that increase of Gasoline price for cars, reduces greenhouse gas emissions significantly. However, increase in fuel price of other sub-sectors has led to more greenhouse gas emissions. The results also show that increase in the share of investment in transport sector to total investment has led to more emissions in each sub- sector. Furthermore, while increase of GDP per capita and urbanization leads to a negative and significant effect on emissions in cars sub-sector, it has a positive and significant effect on buses, minibus and trucks sub-sectors.

Today, the food and pharmaceutical industries are of the most advantageous industries in the economy of Iran. Thus, investing in these industries is beneficial. However, investing is possible either directly or indirectly; i.e. through stock markets. Having enough information about the level of stock price of the active firms in this field is an important prerequisite. In this paper, employing GARCH- Markov Consolidated models, we have proposed a comprehensive mechanism to measure the stock market risk for food and pharmaceutical industries by using daily data during the period of 2009 to 22.08.2015. Results show that economic return of the sugar and drugs industries follows the regime transfers with an asymmetrical structure based on abnormal distributions. Furthermore, the risks for medicine industries are lower than food and sugar industries.

Concern with equilibrium rate of unemployment, NAIRU is one of the most important one for a central bank, since it focuses directly on inflation. To estimate NAIRU, we need Phillips equation. The Phillips equation we have considered here is very close to the so- called "Triangle Model" suggested by Gordon, where inflation rate is determined by three factors: adaptive expectations and inertia, excess or shortage of demand- estimated by the gap between the actual unemployment rate and the NAIRU- and supply shock variables. We consider the NAIRU as a time-varying parameter and is estimated by a state-space model composed of a random walk process that describes its variations over time and of a Phillips equation and Okun's law. The results show that the marginal and average of NAIRU of Iran for the studied period are around 11.07 percent and 13.48 percent respectively; that are high in comparison with developed countries. This means that implementing demand oriented policies to reduce unemployment rate without increasing product capacities may lead to higher inflation. Therefore, it is suggested that policymakers should try to increase labor and capital productivities as well as improvement of business indices.

Tax is one of the most important sources of government expenditures. Tax is also an effective tool for; economic resource allocation, economic stabilization, and adjustment of income inequality. The purpose of this paper is to study the impact of tax revenues on income distribution and human development. To do that, we have used Autoregressive Distributed Lag (ARDL) model for the period of 1971 to 2014. The results show that increase in the share of direct tax revenues and reducing the share of indirect tax revenues of GDP, Human Development Index decreases and inequality of income distribution is worsen. Results also show that decrease in unemployment rate and oil revenues increase, will improve Human Development Index of Iran. Furthermore, inflation has a positive, but not significant, relationship with Human Development Index.