JOURNAL OF ECONOMICS AND MODELING (JOURNAL OF ECONOMICS)
Year:2010 | Volume:1 | Issue:1|Papers Count:8

Industrial Countries in their Negotiation with oil producing countries particularly OPEC, in view of the fact that an Increase in the price of oil is conducive to the reduction of economic growth, expect efforts on the parts of these countries to control price through increase in production.This paper presents an economy assessing model through reviewing energy policy and goals of price taxes on the petroleum products in OECD countries and petroleum taxes on the petroleum market price.The study reveals that an increase of one percent of crude oil prices will lead to 0.22 percent increase in the market price of the oil products if the other factors are kept constant. one percent increase in tax leads to 0.61 percent increase in the market price of oil products and this is exactly three times increase as a result of one percent increase in the price of crude oil. It should be added that if all factors don't change, there would be 0.03 percent reduction in oil demands. An increase of one percent on tax leads to reduction of 0.07 percent product demand (which is a very important factor in the economy of industrialized countries) and its outcome is twice the result of the increase of crude oil. As a result, oil producing countries can argue and barging on the role of tax on oil products and expect them to fix the price and bring about any modification on taxes.

The present paper investigates the effects of exchange rate fluctuations on nonoil exports. Production and inflation are two effective variables on non- oil exports, which are affected by exchange rate. Therefore, the effects of exchange rate fluctuations on production and inflation as well as its indirect effect on non- oil products have been studied. The results revealed that although a direct rise in exchange rate increases non - oil products, the indirect effects caused by it due to an increase in inflation and a decrease in production give rise to a reduction in non- oil production.The results Further revealed that all in all the negative indirect effect of exchange rate fluctuations on non- oil exports through its effect on inflation and production and the effect of These two variables (inflation and production) on non- oil exports is larger than the positive effect of an increase in exchange rate on non- oil exports.

Excessive fluctuations in economic growth as well as inflation, increase economic risks, as a result of which the level of investment, production, and social welfare are decreased. Modem economic theories attribute fluctuations in macroeconomic to structural shocks and internal economic reaction to these shocks. The present paper examines the relative significance of structural shocks in elucidation of fluctuations in macroeconomic variables using the structural auto-regression method. By using a macroeconomic model, the identified structural shocks are as follows: real oil income shock, supply side shock, trade balance shock, real demand shock, and monetary shock.The results of the study show that supply side and oil income shocks are the main sources of economic growth fluctuations. Although positive oil income shock increases GDP growth at a low rate in the short run, it cannot guarantee long - run stable economic growth. Positive monetary shock (Monetary policy) has a positive impact on production on the short run, which turns out to be negative in the long run. All in all, the results of this study indicate that although demand management policies (monetary and fiscal policies) play an important role in stabilizing inflation, their effect on stabilization of economic growth is limited.

Following the Islamic revolution and the imposed war, Iranian economy was faced with a persistent inflationary era. To combat inflation and help the low income families, Iranian government subsidized the basic commodities for a long period of time. As a consequence, relative prices were distorted which resulted in misallocation of economic resources.Recently the government decided to announce an economic reform plan to eliminate indirect subsidies and instead follow a direct money transfer to the needed families. It is thought that this kind of subsidy program will boost economic growth and bring about social justice. But the question is what adverse possible consequences it will impose on the economy of the country.This article investigates the effect of eliminating basic commodity subsidies on the major macro economic variables, such as inflation and economic growth, within a structural macro econometric model framework.It is found that if all subsidies are removed immediately, inflation rate will increase by %22.2 in the first year of implementing the program. Also, economic growth will decrease by %4.06 and will reach reduced to %1.96.In an alternative scenario, if the program is implemented gradually in 5 years time, the inflation rate will increase by %19.2 in the first year, but will gradually decrease over the successive years. Moreover, economic growth will decrease by %4.2 and will lead to %2.

From a historical perspective, economic capitalism has always been entangled with crisis. A survey of crises such as D.S 1929 and 2008 crises demonstrates that this system is crisis generating. The interference of government in the market system which is offerd by Keynes is a temporary remedy and have not been able to solve the problems of economic crisis.From the very stant, Islam is against interest on loan. Such a practice will be able to vanish the cricis by prohibition of' Reba", Islam will operate the economy much more efficient than the capitalist system.

Given the trade limitations, the evaluation of its effects is necessary. Therefore, export and import functions of Iran with 84 trade partners are estimated, based on an extended gravity model with panel data (for the time period of2001 to 2005), by the so called fixed effect method. Our findings indicate that the simultaneous reduction of Iran's and its trade partners' protection indexes will increase both export and import of Iran and the percentage increase in export is more than that of import. But the increase in import is much more than that of export, meaning that Iran's non-oil trade balance will deteriorate. This was considered for different hypothetical but probable levels of protection index of 1 (full free trade) till 2.5 and observed that, in present situation, reduction of level of protection would worsen Iran's non-oil trade balance.

The main purpose of this paper is to shed light on the productivity effects of human capital and technology in Iran's commerce sector. To this end, firstly some literature references are briefly described together with the effective factor of the economy focusing on the commerce sector. Thereafter, empirical models are specified and estimated using the data over the period 1959 - 2004.The total factor productivity growth is calculated by estimating Cobb-Douglas Production function assumes constant returns to scale, while factor shares are used as a proxy for output elasticity's. In the production function, the dependent variable denotes the added commerce value and the explanatory variables include capital and labor force in the sector.The findings of this paper indicate that human capital and technology substantially increase total factor productivity growth in Iran's commerce sector. So, the flow from human capital and technology is by far the two most important determinants of commerce sector productivity growth. Human capital facilitates the realization of productivity growth in the sector. This paper has also found a significant and substantial negative relationship between inflation and total factor productivity growth in commerce sector. Thus, inflation substantially reduces the rate of productivity growth.

The paper answers in the affirmative the question about the need for an Islamic economic model, and then proceeds to delineate its dimensions. The distinguishing characteristic of such a model is to highlight the ethical dimension of the economic calculus- i.e., that without ethical moorings individual economic behaviour remains unpredictable. It shows that rational utility-Maximizing behaviour will be helped by an ethically-oriented reorganization of present-day economic systems in Muslim countries. Formally, the Islamic economic system is presented as an 'Optimum regime'. On the methodological plan, such a regime gives due prominence to both value judgments and positive judgments in making generalizations about an idealized Islamic economy. At the theoretical level, it is a way of transforming their refutable ethical principles into refutable statements about the behavior of economic agents in a typical real-life Muslim society. In practice, for such a regime to reflect Islam's overarching ethical vision of economic processes, it would take assigning top priority to the needs of the least- privileged people in a growing economy. This implies giving greater weight to the wage- goods in total output, minimizing the production and consumption of wasteful luxuries, and redistributing income and wealth from the rich to the poor.