Journal of Economic Policy
Year:2019 | Volume:11 | Issue:21|Papers Count:12

The effect of exchange rate fluctuations on domestic prices plays a crucial role in designing and implementing macroeconomic policies. Thus, it is of great importance to discern the exchange market pressure, including the range of changes in foreign reserves and the exchange rates, as a measure to efficiently manage macroeconomics especially for developing economies. The present study aims to investigate and analyze the behavior of exchange market pressure in Iran in 1990-2012. To this goal, the exchange market pressure index has been computed using the procedures proposed by Edwards (2002) and Kumah (2007). With regard to the fact that the exchange market pressure index in Iran is nonlinear, the results of the analysis through the Threshold Vector Autoregressive Model indicate that lagged variables have no significant effect on exchange market pressure when it is in a low regime, but, when the regime shifts towards a high pressure in exchange markets, the index for market exchange pressure increases. The findings also suggest that money growth and inflation have significant effects on exchange market pressure. Therefore, implementing contractionary policies in a monetary system as well as curbing inflation can regulate the pressure of the market exchange.

Poverty, as a socio-economic problem, prevents societies to attain sustainable development and growth. Therefore, poverty reduction is one of the objectives of developing countries. Knowing the status of poverty and its determinants is essential for the successful implementation of poverty reduction policies. Therefore, in this study, after the calculation of the relative poverty line in the urban and rural areas of each province by using the micro data on the income-expenditure of 38303 households gathered by the statistical center of Iran in 2013, the poor families were identified. On the basis of the initial processing of the data, it is recommended that poverty alleviation programmers pay attention to spatial planning. In the next step, to examine the effective factors in the probability of going out of poverty, the model was estimated with the maximum likelihood method. The results of the regression logit model based on pseudo-panel data with random effects showed that female-headed households are supposed to be in poverty more than males. Also, variables such as the education level of the head, statement of his or her income, and the number of the educated and the number of employees in the household have a significant effect on the probability of going out of poverty. Being in poverty is strongly associated with household size and living in urban areas. The effect of the head’ s age on poverty is U shaped. It means, when the head is young, the probability of being poor is low. On the other hand, when the head is in pension years or old ages, the probability of being poor is high. Therefore, in poverty eradication programs, the government should pay attention to the elderly, especially females who head households with no income.

Theoretically speaking, monetary policy transparency usually refers to the informational symmetry between the central bank and the private sector. High degrees of transparency reduce uncertainty, improve the private-sector inference about the central bank goals, and increase the effectiveness of monetary policies. Over the last two decades, central banks around the world have taken a variety of steps to enhance monetary policy transparency. Nowadays, most central banks provide regular reports on recent economic and financial conditions, the stance of monetary policies, and the outlook for various goal variables. In addition, most central banks in advanced economies have adopted explicit numerical inflation targets in their conduct of monetary policies, which can be considered as an important aspect of monetary policy transparency. However, this movement toward transparency in Middle East countries has been so blunt. So, in this paper, using the panel data approach, the factors affecting the monetary policy transparency in these countries have been evaluated. The results from six estimated models show the negative and significant effects of the past inflation and positive effect of per capita GDP, financial deepening and openness index enhancement. While government efficiency, as an institutional factor, has been affective on the central bank transparency, other institutional variables have no significant influence.

The aim of this paper is to evaluate the effect of income inequality (II) on happiness inequality (HI) in Iran. For this purpose, the literature was reviewed for the relationship between II and HI including income marginal happiness descending, income smoothing theorem and inverted Maslow pyramid of happiness. Then, the factors that affect HI were estimated by means of a threshold regression model during the period of 1973-2014. The estimation results showed that II has a nonlinear and threshold impact on HI. Thus, the Maslow happiness theorem that describes the impact of II on happiness at the top of inverted pyramid was confirmed. In this case, when Gini coefficient is less than 0. 416, in the low II regime, an increase in II has a significant negative impact on HI. This is because of being at the bottom of Maslow pyramid. However, after the threshold point, in the high II regime, an increase in II has a significant positive impact on HI because of moving up the pyramid. Therefore, smoothing income in a cross cutter or time series decreases the downward slope of income marginal happiness, which can decrease HI. Based on the results, policymakers are suggested to pay attention to the Gini threshold point of 0. 416 to decrease HI. In addition, when II is higher than the threshold level, they can improve happiness distribution with income redistribution policies.

In all societies, corruption is considered as a social damage that can cause numerous political and economic damages. It is also considered as one of the main obstacles to development. Therefore, anti-corruption policies have become a priority for countries, especially developing countries. This research is a descriptive-analytic study conducted by the polity IV index to address the principles of anti-corruption policies that should be taken into account. The results of the research suggest that providing conditions in which the society is allowed to move toward openness can help to reduce corruption. The examination of Iran's status also indicates that movement toward an open-access society can reduce corruption.

Increase of GDP in an economic system depends on the amount of investment, for which banks play a major role in providing funds. The purpose of this study is to investigate the effect of bank credits on the economic growthof provinces with the level of their income in focus. In order to assess the role of income level in the effectiveness of banking credits in economic growth, the provinces are divided into high-income and low-income groups. The econometric model of this research is determined using the panel data in 31 provinces and the dynamic panelduring 2006-2014. The results show that the credits granted by banks have had positive and significant effects on economic growth in the provinces. Also, the impact of bank credits on economic growth is higher in the low-income provinces than in high-income ones, and the regional level of income has played an important role to promote the economic growth by bank credits. In addition, the effect of explanatory variables such as human capital, urbanization rate and current expenditures has been positive and significant on the growth of the provinces.

The goal of investing and participating in the stock market and other markets is usually to achieve expected returns. Improving the total factor productivity leads to increased competitiveness, which contributes to the expansion of the market for the products of bourse companies both at home and abroad; the profitability of those companies is, thus, increased. As a result, the improvement of returns will increase the incentive for investors to direct their resources to bourse companies. Also, increasing the total factor productivity leads to an increase in the expected returns of bourse companies which, in turn, leads to increased demand for investment in the stock market. The aim of this study is to investigate the effect of total factor productivity on the mobilization of financial resources in Iran’ s stock market. For this purpose, quarterly data of the 1993-2015 period and Ordinary Least Squares are used. The results of the research show that total factor productivity has a positive and significant effect on the mobilization of the financial resources in the stock market. Similarly, other variables such as stock market liquidity, saving rate and the dummy variable of approval procedures for the online trading of securities have positive and significant effects on the mobilization of financial resources. However, the economic risk and return of rival markets have a negative and significant effect in this regard.

Poverty has always been regarded as one of the most destructive factors that negatively influence the social and economic classes of people in any given country. Obviously, a major goal of economic development is the fair distribution of income and reduction of poverty. Financial development can pave the way for the achievement of these aims and lower income inequalities directly or indirectly. Given that policy makers are always seeking ways to control poverty, investigating the relationship between financial development and poverty seems to be necessary. Therefore, the present study examines the relationship between the two factors within the time interval from 2003 to 2015 regarding the countries represented in the Islamic conference. According to our results, there is a reverse U relationship between those two factors, and most of the studied countries are on the upward part of the curve (U). The results also indicate that financial development reduces poverty more remarkably in high-and average-income countries and in those that are more committed to the rule of law.

Nowadays, bank deposits are one of the most important economic and social tools that depend on various business, service and economic conditions and have an important role in sustainable economic growth and development in countries. In order to provide financial assistance to depositors with privileged positions, equip the existing resources, and provide funds and create planning opportunities for the banking system, it is especially important to have access to adequate bank deposits. With a regard to the necessity of investigating and measuring the impact of economic variables on the amount of attracted deposits, we have used panel data to study the impacts of several factors on the amount of deposits in the banking system. These factors include the number of the employed, value added in various economic sectors and provinces, paid loans, active population, provincial household expenses, inflation rate, liquidity and weighted interest rate. The results are indicative of the fact that independent variables including service sector value added, paid loans and household expenses have positive impacts on the dependent variable. In contrast, the other variables including inflation and active population have a significant negative impact on the dependent variable. Different statistical tests were also conducted using the panel data to choose the random effect model as the final model. According to this model, there is no need to estimate separate regressions for each province.

The concept of time inconsistency refers to the difference between optimality based on the past and the future. The purpose of this paper is to investigate the time inconsistency of monetary policies regarding the exchange rate in the Iranian economy during the period of 1989-2017. This period is broken down into four sub-time periods to evaluate the effects of that inconsistency along with the deviations in the exchange rate. In order to estimate the model parameters, the Generalized Method of Moments (GMM) has been used. Through differentiation of the policy for exchange rate and its effective factors, it is found that inflationary bias in the first and the second periods of this study has been less than that in the third and the fourth periods. Also, currency deviations have led to an increase in the exchange rate volatility due to instability in monetary policies and the inflation expectations of individuals.

The main objective of the study is to investigate the bubble contagion in two financial markets including the exchange and stock markets of Tehran during the period 2008-2018. First, the bubble occurrence in these two markets was dated by the use of the new methods of GSADF, SADF, and RADF. The results of this section showed that both markets were bubbling. The security markets had five periods of bubbles from 2010 to 2015, of which the fourth and the fifth bubbles were multiple. In the case of the foreign exchange market, the bubble occurred during the periods from 2011 to 2013 and from January to February 2018. Of those bubbles, only the third was multiple. In addition, the results confirmed the contagion of the second bubble in Tehran Stock Market to the foreign exchange market and the contagion of the third bubble of the foreign exchange market to Tehran Stock Market during the period under review. It was also found that the bubble contagion from the foreign exchange market to the stock market was more powerful than that from the stock market to the foreign exchange market.

The purpose of this research is to determine the participation rate in a dynamic equilibrium model and to investigate the impact of shocks on labor market variables with an endogenous participation rate. For this purpose, a three-state search and matching model is used in which the labor force can be employed, unemployed or inactive (non-participation). For more accurate analysis, two models have been used. In the first model, the rate of economic participation is endogenous, but, in the second model, it is exogenous. Nash bargaining is also used to determine wages. By the estimation of the model parameters using the Bayesian method during 1997-2014, the simulation results have indicated that the impulse response functions of production, inflation, employment, and participation rates against monetary and technological shocks are in accordance with theoretical expectations and data. However, the unemployment variable shows an increase in the model of in-person participation rates and a decrease in the exogenous participation rate, which is due to the change in the participation rate in the endogenous model. Therefore, evaluating policies on the labor market variable with an exogenous participation rate can be misleading.