Journal of Economic Policy
Year:2018 | Volume:10 | Issue:19|Papers Count:7

From the perspective of modern structural economics, the literature on development economics after World War II has witnessed three waves: old structuralism, neoclassic and modern structural economics. Modern structuralism is based on the comparative advantages of an economy in factors of production, improvement of infrastructures with government assistance, and the use of market mechanisms to allocate resources. Old structuralism advocated governmental development policies that defied the comparative advantage of the economy. In modern structuralism, the role of government in industrial diversification and its upgrading is limited to providing information about new industries, coordination of the corresponding investments among different firms in the same industry, compensating externalities of information to lead firms and foster new industries through helping incubators and encouraging foreign direct investment. The government also plays a leading role in improving hard and soft infrastructures in order to reduce firms' transaction costs and facilitating the industrial development of the economy. Identification and facilitation of growth is an instrument for implementation of new structural economics, which can be implemented through six stages. In this article, the theory, policies and applications of modern structuralism are investigated. The most important aspects of the evaluation include comparative advantage, creating advantage and latent advantage, globalization of production, and implementation problems. It is also pointed out that economic development is not the same as industrial development and coping with problems in picking winners.

The method of financing in the health sector is a principal challenge for authorities. In developing countries, including Iran, the main burden of financing in the health sector is on families. This method is an unjust mechanism because the people’ s utilization of health goods and services depends on their economic status, not their health conditions. Therefore, in such countries, one of the goals for health authorities is the replacement of “ out of pocket” with more equitable methods. The first step for innovating appropriate financing methods in the health sector is identifying and analyzing the determinants of the ability of families to pay. This paper studies the factors that affect Iranian urban families’ health expenditures. In this study, health expenditure modeling is done through a sample selection model using the data obtained from the household income-expenditure survey (HIES) for 18727 families in the urban areas. The results show that there is an increase in the household health expenditure, parallel with an increase in per capita income, education, gender ratio, residents’ health development and the number of the elderly and the non-elderly. In addition, insurance and smoking factors cause a higher amount of household spending in the health sector. Also, the families with married members have the highest health expenditure, while those with never-married members have the lowest. Moreover, there is a sample-selection problem for investigating the determinants of health expenditure in Iranian urban areas; the use of linear regression leads to biased and inconsistent estimations.

Reducing the tariff rates is very important to avoid because it negatively affects domestic industries and leads to devaluation of the national money. Such a reduction, indeed, has multidimensional effects. The aim of this paper is to investigate the effects of trade policy and exchange rate policy in Iran in the framework of a DSGE model for an open small oil-exporting economy on the macro economic variables especially imports and exports. The incomplete exchange rate pass-through in the form of nominal rigidity is also discussed in the model. The model parameters are estimated from 1973 – 2014 using the Bayesian method. The results about the Impact impulse-response function show that the positive shock of exchange rate increases the output and employment and decreases the imports. The impact of this shock on exports, although positive, due to its low elasticity, is not strong enough to increase non-oil exports. Additionally, the effects of positive shocks on intermediate goods tariff rates cause a reduction in the import of these goods, increasing the output and employment, and, in general, reduction of total imports and exports. Also, the positive shock of tariffs on consumer’ s goods causes to reduce the import of these goods and total imports.

The relationship between economy and democracy has always been one of the most controversial issues in humanities studies. In most studies, democracy has been considered as a factor affecting economic variables, but the influence of economic variables on democracy has been investigated much less. Based on the literature, the most important and effective economic factors of democracy are trade and economic growth. Therefore, in this paper, the impacts of trade on democracy have been investigated based on spatial econometric and geographical proximity in 2014. The results show that foreign trade has a significant and positive effect on democracy, but economic growth has no significant effect on it. Also, the effect of spatial proximity on improving the level of democracy in developing countries is approved. In general, the results confirm the spatial effects of geographical proximity and trade on improving democracy.

The purpose of this article is to criticize the criteria of policymaking in welfare economics and illustrate the criteria of economic policy making in Islam. In other words, we want to answer this question: what are the limitations of the criteria for policymaking in welfare economics and what is the solution proposed by the Islamic economics? Benefit-cost analysis is the main criterion of policymaking in welfare economics, and it seems to be rational. However, it has some limitations which are not accepted by the Islamic economics. After criticizing the welfare economics criteria, we illustrate these criteria in the Islamic economics. The results of this research show that the most important criterion of policymaking in Islam is to respect the rights of others in choosing the best alternative which is the base of other criteria like justice and efficiency. We have also added public satisfaction as a second criterion and illustrate the role of Maslahat (expediency) in policymaking. Finally, we show that the benefit-cost analysis is not universal, but it can be used in different situations and by some requirements in the Islamic economics. The criteria of Moslem policymakers are illustrated then.

The main objective of this study is to evaluate the impact of changes in energy consumption on real GDP in Iran within the framework of the non-linear smooth transition autoregressive method between 1965 and 2013. In this regard, the linear model is tested against a nonlinear model. It is found that the nonlinear model has better estimation. Then, using Trasvirta test, the nonlinear logistic model is estimated. The variations in the independent variables are divided into three parts including up, low and middle thresholds of changes), based on the nonlinear logistic model. The results show that the effect of gas consumption on the real GDP is U-shaped. This means that the low threshold rises to the middle threshold, and the middle threshold declines to the high threshold. In the case of electricity consumption, the results indicate that a positive and increasing relationship exists in all the thresholds. Positive changes in oil consumption in the low threshold have a positive effect on GDP changes, and this effect is reduced by moving from the low to the up threshold; in the up threshold, the effect will be in the opposite direction of oil consumption changes.

The aim of this paper is to examine the interaction of monetary and fiscal policies in the Iranian economy. The study was conducted using a new Keynesian dynamic general equilibrium model with sticky prices and imperfect competition assumptions. The policy makers’ reaction functions were determined by optimizing objective functions for each economic condition. The model parameters were estimated using the Bayesian estimation method and the Dynare software. The findings show that a monetary policy has a pro-cyclical behavior while a monetary policy is counter-cyclical. Also, the fiscal leadership hypothesis is accepted in Iran. It was also demonstrated that the central bank focuses on the stabilization of inflation while the government simultaneously stabilizes the inflation and production. According to the results, monetary and fiscal policies in Iran are strategic substitutes. In addition, monetary policies can be more effective than fiscal ones in stabilizing economic fluctuations.