Iranian Journal of Economic Research
Year:2011 | Volume:16 | Issue:48|Papers Count:15

One of the most important issues in financial market particularly for banks is the issue of asymmetric information. Adverse selection could be made from the lack of sufficient information about credit specification, type of preferences and in general, rate of risk taken by borrowers. In this situation average cost of loan repayment will be of interest for the banking system. It will increase interest rate in order to have a lower rate of average cost. So those who take low level of credit risk are not interested in borrowing. And as a result we have a decline in borrower's rate with lower rate of credit risk. Therefore an increase in the interest rate also increases the possibility of adverse selection. As a result they specify interest rate ceiling with lower rate of interest at equilibrium point (over demand in loan market) and because of loan over demand and market clearing, loans and credits are being rationed. In this article credit rationing and its effect on money market, bond market and commodity market will be analyzed by walras's law. It can be shown that in credit rationing, the walras's law does not hold in an effective market unless and until we consider monetary dimension of bond market (credit market) in the model.

Applying the SVAR method of 'Kilian' to the monthly data over the period of 1973-2007, in this paper, we decompose oil price shocks into five structural shocks, namely, Iran political supply shocks, OPEC political supply shocks, non- OPEC supply shocks, world demand shocks, and oil specific demand shocks. Then, estimating separate OLS regressions, based on annual data of Iranian Economy, the impact of these structural shocks on main macroeconomic variables, and outbreak of Dutch disease is studied. This paper finds that the symptoms of Dutch disease have not been observed, following different structural shocks, except for Iran political supply shocks. Owing to dominant role of government in production, and export of oil in Iran, it is evident that the effect of oil price shocks, to a large extent depends on the government conduct, and the Dutch disease is not an inevitable reality for the Iranian economy.

Monetary and banking crisis and their heavy costs during the last three decades resulted in increasing attention to the role of institutional environment, public policy as well as regulatory governance. New research works are done to define indicators to evaluate supervisory rules and regulations in financial markets. The Basel Committee on Banking Supervision-a group of representatives of bank supervisors from advanced countries-issued the Core Principles in 1997 to standardize financial market for Effective Banking Supervision. These principles are accepted by many countries in the world. In this research, we first, investigated the role of institutional environment in banking sector development encompassing 53 countries from 2000 to 2008. The results indicate that well-developed legal (public) institutions have significant effect on banking sector credit expansion. Second, we constructed regulatory indicators based on the assessment of The Basel Committee regarding accountability and independence arrangements for those 53 countries, for which the required data was available. Then, we studied the effect of those indicators on credit expansion in banking system. The results have shown the lack of a significant relationship between banking credit development and the rate of accountability and independence arrangements (as suggested by Basel Committee assessments). Although, these results confirm Ranjit Lall's findings (2009), more information is needed-at least for two periods.

Recent literature of intra-industry trade has paid attention to the relationship between intra-industry trade and adjustment costs. Adjustment costs include the losses due to temporary unemployment in the labor market, which arise from wage rigidity, the research costs, re-location and re-training of labor. Based on smooth adjustment hypothesis, intra-industry trade has a lower adjustment cost than inter-industry one. The present study has examined the smooth adjustment hypothesis for Iranian manufacturing industries at the 4-digit level of ISIC classification by using panel data during time period 2002-2006. For this, intra industry trade has been divided into its types (vertical and horizontal intra-industry trade) and then the hypothesis which is horizontal intra industry trade has lower adjustment cost than vertical one has been tested. Based on the results, the smooth adjustment hypothesis is not verified for Iran while employing total intra industry trade. But by distinguishing intra-industry trade to its types, the hypothesis is confirmed for horizontal intra industry trade. Also, the hypothesis which asserts that horizontal intra industry trade has low adjustment costs compared to the vertical one is verified. Based on the findings, it is suggested to pay more attention to intra-industry trade especially the horizontal one in promoting the foreign trade.

Generally, investors consider simultaneously conflicting objectives such as rate of return, risk and liquidity in portfolio selection. On the other hand, every investor has his own specific preferences about objectives. Therefore, we can use Multi Objective Decion Making (MODM) techniques in order to solve portfolio selection problem. The Studies shows that a MODM technique by nonlinear goals such as minimization of nonsystematic risk and skewness maximization isn't employed for portfolio selection, so a new approach is applied. We employ MODM model to select a best portfolio in 50 superior companies in Tehran stock exchange with regards to optimization objectives of return, systematic risk, nonsystematic risk, skewness, liquidity and sharp ratio. This model is non-convexed, so operational research algorithms can not find the best solution, therefore we use Genetic Algorithms (GA) for achieving nonlinear multi-objective model. In the end, the result of GA is comprised with Markwitz classic model and goal programming (containing linear and nonlinear objectives). The comparison indicates that although return of the portfolio of GA model is less than the other models, but GA has the best results in decreasing risk criteria which completely cover the return and lead to best results. The other advantage of using GA is a higher diversification in its proposed portfolio in comparison with other models.

Financial markets are known to face some difficulties in financing projects. While securing venture capital for high risk projects seems to be of particular importance in application of new financial tools especially those compatible with Islamic rules. Although venture capital contracts based on Islamic rules may seem more complicated than traditional contracts, but new concepts in Islamic Finance have developed and structured new financial tools and which have proven useful in financing of risky projects in developing economies in the Islamic world. This paper intends to analyze those alternative approaches in financial market of the world.

In this study, the effect of internal R&D expenditures and technology imports on value added of Iranian large and medium industries is investigated over the period of 1994-2006. For this purpose, an endogenous growth model is used in which production is a function of employment, capital stock, internal R&D expenditures and capital-intermediate goods imports. We estimate this model for 21 industrial groups by applying panel data approach. The results indicate that internal R&D expenditures and capital-intermediate imports have a significant positive effect on value added of Iranian large and medium industries during the mentioned period. Therefore, the policy recommendations of this study are supporting R&D activities of large and medium industries by government and expanding commercial relation with industrial countries and technology leaders.

"Anfal" and natural resources are viewed as significant sources of financial resources that Holly Shariah assigns their ownership to the Islamic state to pursue the public goals. On this topic, policy-making for management of these resources, and control of their depletion is of paramount importance whereas appropriate policies in natural resource management and Anfal can lead to sustainable development and intergenerational interests. In this paper we introduce principles and policies for utilization of Anfal resources. After addressing the ideas of Islamic jurists (Foghaha), we select the theory and definition of Imam Khomeini about Anfal as a basis for analysis and consequent reviewing of  Hadith and historical issues on Anfal, we conclude that Muslem's interests (Maslehat) and society's benefit is the main criteria for utilizing Anfal. Finally, according to the duties of Islamic government, we introduce a policy prescription for allocation of revenues from Anfal in the areas such as Justice, Economic Infrastructures, Human Development and Necessities. As a result we can assert that given a successful management of Anfal and natural resources, Islamic government can pursue many essential goals of society.