ECONOMIC STRATEGY
Year:2013 | Volume:1 | Issue:3|Papers Count:7

The purpose of this paper is to investigate the effect of human capital on labour productivity growth in Iran during the past three decades. We argue that in order to promote human capital in Iran, it is necessary to account policy making as one of major strategies for productivity growth, and consequently, economic growth. A close examination of labour force performance during the implementation of Development Plans, exhibits a slow growth of labour productivity. Results of ARDL estimation recognized the following as main factors explaining labour productivity growth in Iran: foreign R&D accumulation, human capital, physical capital accumulation, and investment in ICT. Also, domestic R&D accumulation and average education years have a negative effect on labour productivity growth.

The new Keynesian perspective recognizes the role of governments on economic growth, through the choice of monetary and fiscal policy. The magnitude of this role is related with the structure of the economy and the structured set of economic institutions. Thus, one could expect that empirical studies on measuring the consequences of changes in fiscal policies yield different results in different times and places. This study examines the asymmetric effects of fiscal policy shocks, along with growth in money supply, on Iranian economic growth during the period 1959-2009. We employed the Hodrick-Prescott filter as a tool to extract government's positive and negative fiscal policy shocks, and carried out this using the specified Shang Chen 2007 model. Results suggest that the government's positive and negative fiscal policy shocks are fully asymmetric only in the case of construction budget. This asymmetry shows negative (contractionary) policy shocks having decreasing and larger effects on Iranian economic growth than positive (expansionary) shocks.

As public welfare rises in global level and societies exhibit tendencies toward civil liberties and other aspects of democracy, Economics scholars tend to search for democracy indices and factors affecting democracy. Following this stream, in this article we seek answering the question: Is democracy -as an efficient political system- secured by taxation or by using revenues from natural resources (in particular, oil)? To answer this question, we use panel data model with data from 100 countries between 2008 and 2011. We then analyze the relationship between tax ratio in GDP and democracy index; and compare it with the relationship between ratio of revenue from natural resource in GDP and democracy index. The results show that in 100 countries the tax ratio in GDP definitely has positive effects and significant relationship with democracy index, and the oil revenue ratio in GDP is negatively related with democracy index in such a way that the higher the oil revenue ratio in GDP is (in the oil-producing countries) the lower the democracy index. Similarly, the higher the tax ratio in GDP is (in the industrialized countries), the higher the democracy index.

This study examines the effect of R&D on firm performance in Iranian manufacturing industries at 4 digit ISIC codes level in 2007, using a data set consisting 132 industries. While this study is based on the ‘Structure-Conduct-Performance’ (SCP approach), for empirical investigation the simultaneous equations system is used. The four equations which have been used in the study are: ‘concentration’, ‘advertisement’, ‘research and development’ and ‘profitability’. Three stage least squares method (3SLS) has been applied for model estimation. The results show that the incumbents in industries with high level of profitability have less incentive to engage in R&D activities. The results also show that industrial concentration has a positive significant effect on profitability.

On the basis of its national and international goals, each country uses specific policies in different fields including trade. In recent years, a main topic of debate among economists has been the relationship between trade liberalization and import performance in developing countries. The main motivation of countries in moving toward trade liberalization is to obtain economic growth and development and a higher share in global economy. This study investigates the effect of tariff reduction and non-tariff barriers elimination on import of goods in Iran, using time series data during 1971-2007. In order to determine the relationship between import of goods and trade liberalization, we use the ARDLeconometric model and three main variables: real import of goods, imports tariff rates, a dummy variable of liberalization (as a simplification of non-tariff measures), in addition to some control variables (such as relative price of imports, GDP).Research findings indicate that the demand for imported goods in Iran, is elastic to relative prices and real GDP in both long and short-run. Furthermore, import of goods is inelastic to import tariff rate in long and short-run, while in a complete trade liberalization condition, imports will increase. Also, error correction model results show that the coefficient can be quickly adjusted to the long-run equilibrium (balance), in such a way that in each period 84% of non-equilibrium is adjusted.

The purpose of this paper is to investigate the relationship between macroeconomic uncertainty and the size of government in selected developing countries. Fluctuations in GDP growth is considered as an indicator of macroeconomic uncertainty and the ratio of government spending to GDP is taken as a proxy for government size. Taking into account that macroeconomic uncertainty can lead to uncertainty in the market; government in seeking economic stability use monetary or fiscal policies which in turn incur costs and result in increased government spending and larger government size. In this paper, using Panel data model in the period 1980-2009 and the General Auto-regression Conditional Heteroskedasticity model (GARCH) we measure the effect of macroeconomic uncertainty on government size. The estimation results of the model show that increased macroeconomic uncertainty led to increase in the government spending and larger government size in the selected countries.

There might be a link between socio-economic factors such as economic freedom on life expectancy. This paper focuses on the eventual relationships between economic freedoms and life expectancy in seven selected countries for the period 2000-2010. Two estimation models, namely Panel Data and Pooling Data analysis are employed. The first model estimates the effect of economic freedom on economic growth, while the second one estimates the effect of both economic freedom and economic growth on life expectancy. The results suggest that economic freedom appears to have a positive effect on economic growth. Also, a positive effect of index of economic freedom on life expectancy is found. Therefore, we conclude that greater economic freedom increases life expectancy.