Journal of Economic Studies and Policies
Year:2013 | Volume:8 (18) | Issue:2 (93)|Papers Count:10

Financial globalization and accordingly weakening the independent role of national financial markets are taking place. With regard to financial globalization trend, and financial crisis, the need to control the financial markets has made it necessary to construct new indices. But due to difficulty of this subject, a universal index has not been yet built. Thus, different studies of financial stability have used different indices. In this paper, firstly we have surveyed the empirical literature on financial stability and security, and indices that we have used. Then, we proposed a comprehensive index for financial stability (CFSI) to evaluate the stability of financial market in developing countries. The result of this study on 105 country shows that the financial stability increases as the degree of development of a country increases. This study also shows that the oil exporting countries have lower degree of stability relative to the other groups of countries and Iran has one of the most unstable financial markets in the world.

This study has examined the relationship between profitability of Iran’s banking system and its main determinants including competitiveness, financial development indicators and other macroeconomic variables such as inflation and income per capita. To this end, the study has specified an econometric profitability model and estimated it by the panel data approach using data of the Iran’s banking system over the period 1996-2005. The investigation has focused particularly on two groups of Iranian banks: 1) private banks such as Eghtesad Novien Bank, Parsian Bank, Karafarin Bank, and Saman Bank, and 2) non-specialized public banks such as Iran Melli Bank, Saderat Bank, Sepah Bank, Tejarat Bank and Mellat Bank.The empirical results for both groups of banks have shown that financial development indicators and other explanatory variables have had different effects on profitability. A various indicators of financial development as well as bank competitiveness have not had significant effect on the profitability of the non-specialized public banks, while income per capita has affected significantly. This result is similar to the private banks where financial development does not play a significant role in their profitability enhancement. These findings point out the structural problems of the banking system performance in the country. The implication relies on reforming the banking system toward a more efficient performance of financial institutions.

Evidences of internal and external statistics and researches show that total factor productivity (TFP) in Iran economy is low. This paper seeks to extract a framework for explaining the reasons for low productivity performance in Iranian economy.Research method of this paper is descriptive- analytic. Analyzing and using of information, literature, history, and empirical evidences are based on theoretical framework of institutional school especially the North’s theories.In North's view, to improve productivity, two sets of institutional reforms should be implemented:a) The supply side changes: improve productivity by lowering either transaction or transformation costs.b) Demand side institutional changes: supply induced changes in organization and technology alter the perceived costs and benefits to individuals and groups throughout history and engender responses through group action or the political process which in turn alter the productivity of the economy.Achieving high performance in productivity requires viable governance that creates economic institutions and provides effective enforcement. Institutional sets of each country should be designed based on local knowledge. Participatory political system is the most effective mechanism for collecting local knowledge to design such institutions.

During the recent years, our country has experienced the continuous development of foreign trade. Unfortunately, the Volume of exports has continually been lower than that of imports; besides, if this trend continues, it can cause numerous problems for the domestic product in the long run. One of the effective policies in increasing export is the regional convergence policy. One of the most important factors that can change this policy to an effective and efficient one is the existence of potential trade among the countries which are members of convergence. Also, one of the most powerful methods in estimating the potential trade is to use the Gravity model. Identifying the potential (export) trade of Iran to any of its trade partners, especially the countries with which it has common culture and religion, can really help to develop exports at Iran. Turkey, having common frontier, religion, culture and old political- commercial relations with Iran can be an appropriate partner in enhancing the level of trade exchanges. Thus, this study deals with estimating export potential of Iran to Turkey in southwestern Asia by using the Gravity model and based on Panel Data method for estimating over the years 2002-2006. The results of the present research indicate that the de facto volume of exports of Iran to Turkey in the above- said period was much lower than its potential volume of exports. This suggests that Iran has not made the utmost use of its export potentials to Turkey.

Recent theories of international economics traditionally know the oriented innovation in reaction to economic incentives as a principle engine of technological progress and competitiveness. With this view, the innovation depends on knowledge resulting from R&D activities on the one hand and it helps to stock knowledge on the other hand. Consequently, exports to depend on the stock of R&D activities and the stock of effective knowledge and the relationship between them. Also, it can be stated, in addition to promoting exports of each country affected by the stock of domestic R&D activities, but it depends on stock of foreign research and development (through imports of goods and foreign direct investment inflow). The aim of this study is to evaluate the role of real variables stock of domestic R&D activities, stock of foreign R&D activities (through imports of goods and foreign direct investment inflow) and also price variables, exchange rate and inflation rate on industrial export of Iran's economy during the period 1970-2007 with ARDL approach.Estimation results indicate that real variable coefficient of the stock of domestic R&D capital, stock of foreign R&D activities (through the imports of goods), coefficient stock of foreign R&D capital (spillover from FDI in flow channel) is positive and significant. Also exchange rate has a positive and significant effect but inflation rate’s coefficient has negative and significant on industrial export.

The oil revenue in terms of its situation in the GDP and its share in the budget and foreign exchange resources of the Iranian economy is very important. The dependence of government budget to oil revenue and its fluctuations is pointed out by many researchers as the main cause of inflation. The effect of fluctuations in oil revenues on core inflation is evaluated using VARX approach. Results show that, besides a significant positive effect of the permanent (smoothed or long- run) component, there is also a significant positive effect of cyclical component of oil revenues on core inflation. Subsequently, if the government purchases only the smoothed part of oil revenue and discard the transitory part, the core inflation could be significantly reduced.

The main purpose of this paper is to evaluate the inflationary impacts of the increases in price(s) of energy carriers in various parts of the economy. Some variables such as Consumer Price Index (CPI), Producer Price Index (PPI), and general budget of government are three possible scenarios that can be acted by using input-output model. With regard to preferred prices by the government, our findings show that inflationary consequences of shock (rapid) treatments are so serious that it cannot be applied. Other options like gradual change scenario in three steady and planned steps entails lesser inflationary outcomes compared to the same measures taken in five steps. Similarly, all the studied scenarios demonstrate that implementation of price adjustment in energy carriers would decrease the amount of budgetary deficit.

Accumulation of human capital and social capital as important factors which have effects on the physical capital formation and accumulation and also on economic growth are well known, while these factors have the impact on each other as well. Accumulation of human capital depends on both internal parameters (quality, quantity, equality and social obligation) and external parameters (university, industry and government relations). On the other hand, strengthen position of religion, moral idealism, confidence and rationality in personal and social life, strengthening non-governmental organizations, education, social justice and equality, respect the rights and property of others caused the accumulation of social capital in society. In this paper the relationship between the accumulation of social capital, human capital, and physical capital and GDP growth during 1346- 1386 is studied. Using Granger causality test and the standard error correction model determined that in the short term there is a relationship between accumulation of physical capital and social capital and human capital accumulation as well. Also, there is a one-way relationship from economic growth to the accumulation of social capital and physical capital accumulation. But in the long run there is a relationship unilateral from accumulation of human capital to accumulation of social capital, a two-way relationship between the accumulation of physical capital and social capital accumulation, a one-way relationship from economic growth to accumulation of social capital.

There are a lot of studies about Iran's economy that consider the effect of government size on the economic growth and come to different conclusions. Some of these studies point to the positive effects and others point to the negative effects of government size on Iran's economic growth. All of these studies only focus on the effects of demand- side and so the effects of supply-side are neglected. The main aim of this paper is filling this gap and considering the effects of demand-side and supply-side simultaneously (and so review of total effect) effects of government size change on economic growth. In order to achieve this goal Iran's economy data during 1966- 2007 have been used. The results shows that government size from supply- side (by way of putting into productivity factors and share of private investment in GDP) has negative effect on economic growth and from demand- side has positive effect. Also, this result has been achieved that the negative effects of supply- side overcome the positive effects of demand- side and so the total effect of government size on economic growth will be negative.

Identifying the factors that contribute to sustained economic growth is the main concern of economic researches. The present paper employs a Bayesian econometrics approach based on Bayesian Model Averaging (BMA) method to investigate the effect of size and quality of government on economic growth in developing economies. The empirical findings show that the size of government do not have an important role in explaining the long run economic growth, where as quality of government positively affects the economic growth of developing countries. Despite, improving in one of the good governance index such as Voice and Accountability in absence of increasing in government quality might decrease the economic growth in long run.