Journal of Economic Studies and Policies
Year:2011 | Volume:7 (17) | Issue:1 (84)|Papers Count:8

Inflation has negative effects on economic welfare in different ways. In other words, it may cause welfare costs for society. Many studies indicate that there is a positive and statistically significant relationship between monetary policy and inflation, particularly in developing countries including Iran. Estimation of welfare cost of inflation may help policy makers as well as monetary authorities to evaluate the welfare effects of their policies and decide how to proceed. This paper defines a money demand function for Iran's money market, then by applying advanced econometrics techniques and based on Lucas Logarithmic model (2000) and Caygan’s semi log version (1956), the welfare cost of inflation is estimated for the period of 1958-2007.The results indicate that if the inflation rate increase from 3 percent to 15 percent, the welfare cost of inflation based on the logarithmic model would increase from 0.14 percent of GDP to 1.7 percent of GDP and based on the semi logarithmic model, from 0.12 GDP to 2.3 percent of GDP. The paper argues that the semi logarithmic model is more appropriate for calculating welfare cost of Inflation in Iran.

Using an aggregate supply-demand specification and its relevant variance decomposition analysis, this paper explores the major determinants of business cycles in the Iranian economy over the period 1970-2008.Empirical results indicate that GDP has played the major role in its own instability during the period. This reveals the fact that the main components of GDP such as investment, consumption, trade balance and government expenditures have caused substantially business cycles. Additionally, the Iran’s business cycle has been resulted by the OPEC oil price and its fluctuations through trade balance, terms of trade (TOT) and exchange rate.Moreover, the empirical results arising from the computed cross correlation coefficient between GDP and the relevant determinants show a co-movement relationship between GDP, prices and real money balances. Terms of trade and exchange rate have had a lagging effect and a leading one on the country’s GDP, respectively.

Iran's share of world exports during the recent years was not remarkable. Therefore, development of nonoil export is necessary to reduce dependence on oil revenues. Real exchange rate is one of the important variables affecting the non-oil export. In this context the behavior of real exchange rate effects on different economic variables, such as export is important. The main objective of this study is to investigate the effects of real exchange rate volatility on the non-oil export during the years of 1971-2006 in Iran. To achieve this purpose, the model of study is estimated using Johansen Juselius cointegration and VECM approach. The findings indicate that the domestic and foreign GDP have positive long-time effect on real export in Iran economy. The terms of trade and real exchange rate volatility indices have negative effects on export in the study period. These findings are compatible with theoretical and empirical studies in developed and developing countries. The above findings were approved by the impulse response functions results. The main policy implication of this study is that, the government by using appropriate exchange and monetary policies should reduce the volatility of real exchange rate.

This article seeks to examine the export-led growth theory using Feder (1982) neoclassical growth model for Iran. For this purpose, time-series data released by the Central Bank of Iran for the years (1959-2007) has been used.After the unit root test, in order to investigate co integration between the two economic variables-export and GDP two Engel-Granger and Johansen's methods were used. Then, the causal effects of export growth on the growth of GDP and growth of investment were tested. Finally, the reactions of the variables to the shocks were investigated by estimation of vector autoregressive model (VAR), using the impulse response function (IRF) and variance decomposition methods.The findings of Engel-Granger's method didn’t confirm the co integration between the variables of the model. However, a co integration vector was found by Johnson's method. Furthermore, the causal relationship from export to GDP was confirmed but it was rejected from export to investment. Impulse response function showed that the response of GDP and export in response of one standard deviation shock has a similar trend. In the way that it regressed to its long run trend after 17 periods. Investment regressed to its permanent period after 8 periods. The findings of variance decomposition showed that 100 percent of the variation of GDP is derived from the variable in the first period and in the second period 91 percent of the variation of the GDP was explained by the variable and 1.3 percent of the variation was explained by investment.

Based on experimental and theoretical studies in the field of crime economy, income inequality is one of the effective factors on crime. This paper investigates the relation between income inequality and other economic factors by panel data among the provinces all-over the country. According to crimes models, there is direct relation between income inequality and murder or vehicle theft with coefficients of 0.084, 1.332. Among the estimated models, there appears a positive and robust relation between poverty and violence with coefficient of 0.034. Moreover, the positive and meaningful effect of population density is approved by coefficient of 3.381 for theft, percentage of population aged (15 - 19) by coefficients .35, and 5.858 on murder and theft and the percentage of population aged (20-24) with coefficients of .239 and 1.736 on murder and violence. The gained results provide the policies that could help to fighting the crime in Iran.

Economic growth and promoting the nation’s welfare is one of the main concerns of governments and policy makers. Also, the process of per capita income convergence indicates changes to countries welfare. In this paper, in order to realize the convergence process of Income per capita of Iran with income per capita of 129 countries we use the time series model and ADF unit root test with multiple structural breaks. The results of this study show that, first, in Iran the most important shocks occurred in the years 1966, 1973, 1977-1978, 1985 and 1997. Secondly, due to various shocks, Iran could not reach to specific steady state in per capita income. Thirdly, Iran could not escape vicious circles and converge to high level per capita income during 1950-2006.  Although, due to the first oil shock, the level of per capita income increased, but the negative shocks in the later decades leads to not only a decrease in per capita income but also a divergence between Iran per capita incomes with high per capita income countries.

The increase of production capacity through the increase of factor productivity always has been the big concern of economists. Knowledge is one of effective factors in productivity. The purpose of this paper is to investigate the impact of knowledge on labor productivity in developing countries during 1980-2004. To analyze the data, an unbalanced panel data approach was used. The results show that during the period under consideration, the pillars of innovation system, information infrastructures and economic and institutional regime had positive and significant impact on labor productivity in developing countries. The pillar of education and human resources has positive effect and insignificant on labor productivity in developing countries. Also due to the technical gap in developing countries and developed and low absorption capacity in developing countries, the impact of changing in the capital-labor ration on productivity is in significant.

The present study attempts to assess the relationship between Intellectual Capital, operational cash flow and net value added of companies admitted in Tehran stock exchange during the period 2004-2007 Related data are collected from Tehran stock exchange database and also annual financial statements of the above mentioned companies for the same period. Transformed logarithmic form of Cob Douglas production function and also pair wise Granger causality tests have been applied to investigate the relationship between intellectual capital, before taxation profit, operational cash flow and value added. Results indicate that there is a positive and significant relationship between intellectual capital, before taxation profit, operational cash flow and value added of the companies enlisted in Tehran stock exchange during the period of study.