JOURNAL OF SUSTAINABLE GROWTH AND DEVELOPMENT (THE ECONOMIC RESEARCH)
Year:2019 | Volume:19 | Issue:1|Papers Count:7

The exchange rate as an important macroeconomic variable affects various economic sectors from different aspects. This study aims to determine the effects of exchange rate shocks on the performance of economic sectors of East Azerbaijan Province. To this end, first exchange rate shock is calculated using a non-linear Markov-Switching (MS) model and is included as an explanatory variable in the final model. To estimate the nonlinear model based on the maximum likelihood function, a MS model with two regimes and a pause, i. e., MSIH (2)-AR (1), is selected. Then, a panel data model with varying coefficients is estimated by pooled mean group estimator (PMGE). The model is used to analyze the effect of uncertainty in real effective exchange rate on value-added of 15 economic sectors of East Azerbaijan Province over the period 2000-2013. The results indicate positive and significant effects of capital, labor and the exports on value-added of economic sectors. Among the 15 districts of the province, exchange rate volatility has a negative and significant influence on value-added and production of 4 out of 15 sectors. The results call for paying more attention to exchange rate volatility and adopt effective policies to remove its adverse effects.

Lack of reliable statistics relating to government debts in Iran's economy, not only has it influenced on the optimal management of resources and debt, but it has been one of the most important factors affecting the lack of theoretical and experimental literature in this field in Iranian economy; Somehow that he existence of extensive international literature in world, has led to very limited studies in Iran. In this study, the time series of government debt are calculated in four ways. Furthermore, this article has two ways to calculate the optimal ratio of government debt to gross domestic product, and then estimate financial space in Iran economy. In first way, without time series of government debts and based on a simple model this proportion was estimated at 15%. Despite the advantage of this method of not using the time series of debt due to the adoption of some assumptions that are inconsistent with the conditions of the Iranian economy, we cannot accept it easily. Therefore, the second method was investigated, in which first government debt series has been set up and then, using a smooth transition regression, the government's debt ratio was extracted which was 19 percent. Estimates performed in two ways, the highest government debt ratio has been experienced and the ratio of government debt that leads to negative economic growth, show that the government has a fiscal space to 30 or 32 percent of the government debt to GDP ratio.

Intervening government and performing environmental policies are among solutions for reducing production externalities and achieving sustainable development. Indeed, institutional quality is an effective factor in selecting optimal environment policies. This paper tries to identify optimal environmental policy among common public tools for intervening (pollution taxes and permits) in the presence of environmental and economic uncertainties with various institutional quality degrees. In this paper, institutional quality is included in a dynamic stochastic general equilibrium model and its effect on choosing environmental policy is considered. The results showed that pollution permit is preferred to taxation on pollution with various institutional quality degrees. In addition, with improvement in institutional quality, if only shock is an environmental shocks, then taxation on pollution will be an optimal policy.

Exacerbating income inequality and increasing crimes give rise to waste of human and financial resources of the society. However, causality direction between income inequality and crime remains a controversial issue. Applying Hsiao’ s causality test for the 1984-2014 period, this study examines the direction of causality between these social problems in Iran. The crimes under study include crimes against property (embezzlement, bribery, forgery, theft and bounced checks) and violent crimes (murder, battery, duress and harassment). In addition, Gini coefficient is used as an inequality index. The optimal lag lengths are one for crimes against property and two for violent crimes, respectively. Findings indicate significant bidirectional causal relationships between income inequality and two kinds of crimes.

The application of fiscal stimulus programs (FSPs) to achieve economic growth requires knowing the source of its funding, because different methods and various taxation bases for financing of the FSPs affect their effectiveness and influence the economy. The objective of this paper is to choose the best tax base to finance FSPs in Iran, according to the lowest distortionary effects on efficiency of increasing government spending. For this purpose, first a dynamic stochastic general equilibrium (DSGE) model is designed for Iran. The model consists of three economic factors including the household, domestic firms, and the government as fiscal and monetary authority, and its reliability is checked through the calibration procedure. Then, the multiplier of government spending is estimated within four scenarios for financing government spending. These include the application of tax on income, tax on consumption, a combination of tax on income and tax on consumption (value added tax) and the budget deficit policy. The results show that taxation compared to a budget deficit policy results in decreasing efficiency of the government's fiscal stimulus. However, the reaction of domestic production to the increase in government spending indicate that while a tax on consumption may cover government spending, it has a low negative effect on the efficiency of this fiscal stimulus.

This paper aims to explain the role of good governance in the realization of the knowledge-based economy within a quadruple helix innovation system (QHIS). It employs an analytical-descriptive method, while focusing on the econometric models within Eviews9 software environment. Theoretically, the paper is based on institutionalism approach. The interaction of good governance and knowledge-based economy is described after defining the concepts of QHIS. Then, the relationships between innovation (as the goal of innovation systems and knowledge-based economy) and good governance indicators are evaluated within an econometric model. To do this, good governance indicators in Iran are compared to those of the Northern Europe and South-Easter Asia as regions enjoying high scores in knowledge-based economy indicators. The findings indicate the impact of good governance on realization of the knowledge-based economy through various channels including property rights, enforcement of contracts, domestic and foreign investment, brain drain, human capital development, and research and development. Alike the conceptual part of paper, the results reveal positive and significant relationships among good governance indicators and innovation. Considering the importance of good governance in realizing a knowledge-based economy, good governance index is selected as the fourth helix in QHIS for Iran.

Income distribution is of crucial importance for policymakers from the social justice viewpoint. In recent years, financial tools and intermediaries have been developed in the global economy. Thus, investigating the impact of financial development on the income inequality has attracted the attention of economic researchers. Financial development affects income distribution through both channels of economic growth (directly) and increasing access to financial services (indirectly). Many studies have been conducted regarding the effects of financial development on income distribution in Iran with different methods and indicators, and even contradictory results. This study analyzes the effect of financial development on income inequality using various indicators and the structural vector auto-regression (SVAR) approach. The findings confirm the direct effect of financial development on income inequality, or the inequality-narrowing hypothesis, though they have no decisive implication on the indirect effects of financial development on income inequality, or the inequality-broadening hypothesis.