Iranian Journal of Economic Research
Year:2005 | Volume:7 | Issue:24|Papers Count:12

Investment is perceived as a major factor in job creation in almost all sectors of the economy and by the policymakers. In this paper, we investigate if investment has the same effect on the job creation in all the Iranian manufacturing sub-sectors using the data with two-digit ISIC codes. Research findings reveal that the first to fifth strongest effects are among the "textile, wearing apparel and leather products", "wood and products of wood", "food, beverage and tobacco products", "machinery, equipment and metal instruments products", and "non- metallic mineral products", respectively. As for the "basic metal", "chemical products" and "paper, publishing and printing", there is no significant statistical relationship between investment and employment.    

This paper aims to estimate labour productivity in Khuzestan's industries during 1971-2001. To this end a generalized Cob-Douglas model is applied in which capital stock, gap between actual and potential output and research cost are independent variables. Since the data on the fist two variables were not available, two methods, i.e., exponential trend of investment and Intriligator method, were applied to generate them. The findings of the research show that labour productivity has direct relationship with capital stock as well as research cost, but indirect relationship with output gap.

In Iran, financial market is heavily dominated by the government. The big share of market is owned and run by government, particularly in banking sector. In effect the range of interest rates for different deposits and loans in banks are fixed by Islamic Republic of Iran Central Bank (IRICB). Since the rates are well below the equilibrium levels, selective credit policies are common components of financial restriction in Iran. In other words credit rationing is implemented in official market. Under such circumstances, a black marker for deposits & loans is formed. It operates with very higher interest rates, but very efficient with respect to decision making process. The two official and non-official (black market) markets form the two-sector financial system of Iran. Each sector is managed with different rules and policies. As a result some well known rules in monetary policy do not work in the expected way in Iran. In particular decreasing interest rate policy in official market does not boost the demand through investment. We show theoretically the subject by a modified version of Loanable Funds Theory for a two-sector financial market. Moreover an estimated Iran investment function confirms empirically the theoretical approach. Engle-Granger Test confirms the results too. Also financial repression in Iran causes some transfer payments by deposit owners to those receive loans in official market which could be as high as over %10 of GDP. The policy implication to be adopted by policy makers is a well known deregulation policy which results in integration of the two markets.      

Revenues obtained through gas and oil sale compose a considerable and important part of the Iranian government revenue and the GDP. In this paper, after a brief review on oil sector and income resulting from its export,the authors study the literature pertaining to export instability and its impact on economic growth. Using moving average method with a five-year lag, they found a process for export divergence from which considered as a base for instability. They suggest five definitions for instability as follows: Divergence absolute value, square root of divergence, squared divergence, divergence absolute value for one unit of the estimated amount, and negative divergence. Instability is then considered as a variable in the traditional production function of Feder, which is estimated by ARDL model using five definitions of instability. The findings indicate that there is a negative relation between the first three different definitions of instability and economic growth. Regarding the fourth definition, there is no significant relation and cointegration among the variables is also doubtful. However, regarding the fifth definition, there is a positive and considerable relation between export instability and economic growth and it seems that the fifth definition is not a suitable method to define oil export instability.

Fiscal disequilibrium causes budget deficit. The budget deficit is usually financed by borrowing from central bank, which increases monetary base and money supply followed by a rise in price level and inflation. The process of generating revenue and financing budget deficit by creating inflation is also known as inflation tax. Relationship between inflation and income generated by this process is not linear. The government income at first has increasing trend, and after reaching its maximum point would fall. It is very similar to the Lafer curve. In this paper, the inflation propensity of money velocity has been determined by using the monetary and fiscal data, which has been used to obtain the optimum size of money growth. The optimum size shows that how much money should be printed by government without generating inflation.   ,  

Iran as a developing country possesses rich and extensive energy resources has an advantage in energy-intensive industries. In this research, Granger-causal relationship between economic growth in Iran and various energy carriers including oil products, electricity, natural gas and solid fuels are investigated using Toda and Yamamoto procedure for period 1967-2002. The results reveal that there is a unidirectional Granger-causal relationship from electricity consumption and oil products consumption to economic growth. Likewise, there is a unidirectional Granger-causal relationship from economic growth to solid fuels consumption and natural gas consumption. Estimation of error correction models reveal that in the short run and long run, there is bidirectional Granger-causality between electricity consumption and economic growth. Likewise, in the long run, a unidirectional Granger-causality runs from economic growth to natural gas consumption. Therefore, in the cases that unidirectional Granger-causality runs from energy consumption to economic growth, energy conservation policies should be designed carefully in a way that utilization of such policies doesn't have diminishing effects on economic growth. Accordingly, we suggest a set of "optimal usage" and "efficient consumption" policies in economic sectors. In the cases that unidirectional Granger-causality runs from economic growth to energy consumption, energy conservation policies could be implemented without impeding economic growth.    

The importance of intra-industry trade (IIT) is in the conjunction with its role in exploring trade potentials in all countries, and interpreting the trade relations among themselves. This paper strikes to calculate the extent of Iran's IIT using Gruble and LIoyd index (G-L) during 1998-2002, while a relevant test indicates that there is no significant difference between G-L method and other IIT measurements for the results obtained. This study has focused on analyzing two different commodity groups. First, IIT index has been measured at the 5-digit level of the ISIC, so that the computed IIT on average for 1998 and 2002 are 17.14 and 27.82 percent, respectively. Second, the IIT at the 6- digit level of the HS for these years are calculated as about 9.28 and 14.2 percent, respectively. The latter is much different from the former calculation in which its ratio is higher than that of the later classification even though both results have a similar direction in changes. Additionally, the paper has calculated the regional IIT index to evaluate the position of lran's trade partners in the selected trading blocks. The results reveal that Iran's IIT has the most similarity and convergence with the OIC implying the realization of the Islamic Common Market (ICM).

Solar energy is one of the main renewable energy sources in Iran and many regions (specially central desert) have considerable potential for solar energy utilization. The objective of this paper is an economic evaluation of solar (photovoltaic) power plant utilization compared with both diesel power plant and power grid connection in the central rural regions in Iran. The electricity costs have been computed by using Life Cycle Cost Analysis (LCCA). Results of different scenarios indicate that unit energy cost in photovoltaic system is 960 Rls/k Wh which is less than unit energy cost in other electricity supply options.        

Non-parametric test of revealed preference identifies consumers' preferences by comparing their choices in different times. Unlike the parametric tests, non-parametric test means that no parameter is estimated and no functional form is imposed on the utility and/or demand function. If a set of consumption data satisfies generalized axiom of revealed preference (GARP) then there exists a non-satiated, continuous, concave, monotonic utility that rationalizes the data set. Existence of such utility function means that consumer behavior is rational. In this study, urban households' aggregate consumption data-involving 20 categories and subcategories-are used to investigate the rational behavior hypothesis in period 1965-2002. The findings indicate that rational behavior hypothesis is reliable and urban households' aggregate consumption data may be rationalized by a neoclassical utility function.