Iranian Journal of Economic Research
Year:2003 | Volume:5 | Issue:15|Papers Count:7

The effectiveness of the current and capital expenditures of government are different to achieve the economic optimal growth rate in Iran. In this paper at first, the aggregate consumption was classified by income groups. Then, the effects of current and capital expenditures of government on the economic growth rate were estimated by a system of simultaneous equations.The results show that the capital expenditures effect is more than current expenditures on economic growth rate.Separation of the consumption function in terms of income groups was useful to calculate income multipliers. In this situation, the results also show that the impact of current and capital expenditures on consumption of different income groups are not the same.

The first objective of this study is to understand the interaction between the industrial and agricultural sectors of Iran, and the second is to evaluate the relationship between tomato production, and the GDP industrial growth. It uses a simultaneous analysis of the impact of agricultural and industrial GDP on one another.The data were collected from PDS information bank and FAO and cover the period 1978-2000. Estimation was done by the ordinary least squares (OLS) method and two-stage least squares (2SLS).Results show that these sectors are complementary to each other, but agriculture tends to benefit more from industrial growth. Also, the results indicate that the tomato production can be affected by industrial growth, but the tomato production coefficient is small in tomato - dependent GDP industrial equation, meaning that tomato production has little impact on industrial growth.

In this paper, we study the literature of financial development and economic growth. The financial systems in respect to their operations and their effects on real sector are considered.The result of an empirical study about the financial crises and their effects on the economic growth and determinants of real sector adjustment after the financial crises are analyzed.The study shows that the financial crises have a short-run negative affect on the real sector of economy. Also the export orientation policies, external and internal environments, and financial depth have permanent and significant effects on the real sector adjustment after crises. It is depicted that the other variables have a temporary effects on the real sector adjustment after crises.

In this paper, the structural changes of self-employment are studied in economic sectors of Iran by using decomposition methodology during 1956- 96.The self-employment changes in economic sectors in ten-year period can be decomposed into several components such as employment and self-employment shares.In this study these factors and their effects on self-employment changes have been analyzed.The period at and the extent to which the total self-employment and economic sectors have changed due to changes in the total employment and sectoral have also been analyzed.Finally, self-employment changes are studied based on factors such as age, sex, region, and are compared with different paid employment of public and private sectors.

This paper has decomposed, statistically, the real GDP of Iran into three components, long run trend, business cycles and short-run shocks. This is devoted to the empirical measurement, identification and causes of the business cycles. It also estimates GDP growth on the basis of estimated trend, business cycle and irregular component.The methodology consists of three steps: The first, to dissect the real GDP to get its components, the second, empirical investigation of the business cycles which involve identification and causes, and the third, to predict the components into future. First is assumed that annual series of real GDP is an aggregate of three components including trend, cyclical movements and irregular movements. The HP filter is used in two stages to separate these components; a) to extract the long run trend from the original series and b) to filter out cycles from the rest. Second, the main macro variables are tested in terms of co movement volatility. And finally, the trend and cycles into future over a five-year period are estimated using ARIMA.It is found that the trend growth of real GDP is negative, during the periods of 1356-61 and 1364-67 Iranian years. The results also show that the economy of Iran has undergone seven complete business cycles, and it is now facing the recessionary phase of an eight business cycle, which has begun in the early 1380. It is projected that the current recession will continue until 1383 (2004), and then recovery will take place.It is also found that the Iranian economy is cyclical in a BC sense.Statistically, the results show that the GDP cycles last, on average, 6 years.We also showed the existence of co movement between GDP and the most relevant macro variables. In other words, the main aggregates are also cyclical and their peaks and troughs occur at more or less the same quarters as the GDP.Finally, the results indicate that investment and exports have an active role in generating cycles. Most major finding is that the Iran BCs are caused by shifts in oil revenues. The evidence shows that this variable composes all the characteristics of the typical causes and leads the GDP movements.

This paper intends to draw the relation between real exchange rate variability and the choice of exchange rate regime. The hypothesis was tested by estimating a simultaneous Limited-Dependent variable model with data from a time series during 1973-1996. The paper examines a number of exogenous determinants of exchange rate variability and the choice of exchange rate regime.Our results indicate that: 1) The more opening in Iran's economy, the greater in REER variability, 2) An increase in domestic monetary shocks will result in greater REER variability, 3) REER variability decreases in the fixed exchange rate regime, 4) As an openness increases, the choice of the floating regime is more suitable, 5) The greater REER variability, the more likely a fixed exchange rate.