ECONOMIC RESEARCH REVIEW
Year:2010 | Volume:10 | Issue:3 (38)|Papers Count:14

State - Market position in Iranian Economy is determined according to headlines given in article 44 of IR of Iran Constitution.According to the article 44, most of important economic activities like telecommunication, power generation, shipping, airways, railways, etc. should be owned and operated by state unless it is harmful for economic development of the country. That is why many Iranian economists believed there was less opportunity for private sector participation in Iranian economy.Recently, Iranian Government has started new privatization program according to which 80% of total shares of most of the SOE’s should be transferred to private sector. The main goals of this program are to increase productivity of Iranian economy, reducing monopolies and promoting competition among firms.This paper examines the effect of Iranian privatization program, on some key economic variables like GDP, employment, inflation, trade, etc. by using a CGE model. According to the results obtained in this research, output, employment, trade volume are expected to increase after privatization, but inflation rate would be reduced.

This study tries to measure core inflation in Iran' s economy, using statistical approach. The necessity of knowing about core inflation is that it increases signals to likely noises (shocks). Through using coring inflation criteria in policy making, monetary policies become more effective, as policymakers just react to fluctuations in measured inflation, ignoring temporary noises. Core inflation criteria is an appropriate method for both the measurement of current and future inflation trends which are targets for monetary policy.The results show that the method based on exclusion of "food and education" groups, is the most accurate to measure core inflation. On the other hand, "housing" group, coincident with expectations, known to be the most sustainable component of inflation in Iran's economy. Therefore, to control inflation on the basis of results, consideration of a 5-years plan for inflation targeting is recommended.

Assessing the demand for money is necessary for making decisions and determining the monetary policies for economic growth and development goals. In this article, Iran's money demand has been forecasted in 1404 horizon by using VECM, VAR and ARIMA time series models and using data during the 1355-1385. Results show that ARIMA model with 1.3 percent error is the most suitable approach for money demand forecast. Hence, results predict that money demand will have an annual average growth rate of 26 percent until 1404.

This paper aims to identify the main determinants contributing to business cycles in Iran in short and long run. The paper tries to underpin the impulse response function of output to aggregate supply and demand shocks. We use annual data from 1959 to 2006 to decompose the cycles from trend, implementing band pass frequency method with the approach of Baxter and King. Then we use Engel and Granger causality test to determine the causality relation between aggregate demand cycles and real GDP, with and without oil. To determine the structural shocks threatening the Iranian economy, we use a Structural VAR with the restrictions imposed in Blanchard and Quah's study. The result of our study indicates that oil revenues are one of the most important factors contributing to business cycles in Iran.The results also suggest that the speed of adjustment of aggregate output to structural aggregate supply and demand shocks varies depending on whether the shock originates from the supply or demand side. The shocks last for four to five years if it originates from the supply side and lasts for six to seven years if it originates from the demand side. In other words shocks originating from the demand side last longer compared with the supply shocks. The structural variance decomposition of forecast errors suggests that most of changes in aggregate output can be attributed to supply structural shocks, whereas most of changes in prices can be attributed to structural aggregate demand shocks.

This study aims to survey the effects of income tax, current and capital expenditures as means of fiscal policy on macro economic variables such as GDP, total investment, private consumption and inflation in Iran, s economy using quarterly data during 1994: 2- 2006: 1. In this field model of vector auto regression (VAR) has been used. Results indicate that tax, current and capital expenditures have positive effects on GDP and real interest rate has negative effects on GDP. Construction expenditures has a low share in investment fluctuations. Also, concerning the high share of current expenditures and income tax in GDP fluctuations, it would be preferable to use the construction expenditures as a policy instrument. Regarding the results, one cannot expect that the government current expenditures and taxes would ensure the sufficient effects on economic stability.

Government and its size affect on economic performance and has been in the center of attentions in economic discussions for many years. Some theories prevent government from intervention in economic activities and the other believes that government could accelerate growth and development. In the latter context, Barro believes that government expenditures could improve economic growth performance if it can modify externalities, monopolies and problems associated with public goods. The government has to define property rights and establish security in economy to improve public participation and consequently economic growth rate.The result shows that the relationship is nonlinear and optimal share of government investment expenditures to GDP is approximately 9.6 percent.

The interaction between economic growth and quality of environment is a controversial Issue that has attracted a lot of attention. Most of the empirical studies have concentrated on the relation between per rapita income and a variety of pollutants. This paper, for the first time in Iran, presents a dynamic simulation model for the quantitative analysis of environment policy and technical progress. This model simulates the emission path by energy demand and supply equations. Energy demand is considered as a function of income, price and population and is estimated by ordinary Least Square. In energy supply two separate equations are considered; one presents existing polluting technologies and the other one emphasis the low- polluting technologies. The model was used to develop scenarios for PM, SOX, and CO2 abatement in Iran.The results show that income is still an important variable in determining pollution and substitution of natural gas with oil products as an environmental policy, which can reduce the emissions in shorter time than the Environmental Kuznets Curves (EKC) of economic growth and pollution. But it doesn’t mean we can use natural gas beyond a normal level.Then we should adapt the appropriate price policy and invest in clean technology to reduce pollution while raising income.

This paper studies the role of the institutions in oil revenue effect on economic growth in oil exporting countries. The methodology of this study is based on Panel econometric models for 23 oil exporting countries. The original hypothesis of this study expresses that the key variable in oil curse or blessing, is institutional quality. In fact, the phenomenon of resource curse happens in countries of which institutional quality index is lower than the threshold level of institutional quality. The results of this study support this hypothesis.

Regarding to the concept of “oil as an exhaustible resource” and entrance of backstop technology and economic depletion of oil, the importance of modeling and economic programming in the oil market has been risen dramatically in recent years. As a result this study aims to achieve an optimal path of oil production of Haft-Gel oil field by an optimization model. This model includes income and cost functions and economic and engineering restrictions such as oil production and gas injection functions. In this model, MATLAB optimization toolbox has been used in order to find optimal paths of oil production and gas injection. Then, these paths have been simulated on the basis of different discount rates and planning period. The results show significant difference between optimal and actual amounts of oil production and gas injection. This indicates that (estimated) bias in oil production policy results in losing national benefit.

Creating new opportunities and utilizing the existing production potentials are the main determinants of demand for labor. In Iran’s economy, limitations of markets, excess capacities in some of industries are prevalent. Increases in final demand and capital formations reflect the roles of domestic, demand and net export on output and thereby, creation of job opportunities. Making use of 10 sectors input-output table (2001) of Iran, this paper ranks the output and employment capacities of Iran’s economy. Our developed indicators consist of, backward and forward linkages, and elasticity’s of input-output table. Findings indicate that, since in all of sectors, employment elasticity’s are less than output elasticity’s, growth oriented policies necessarily are not employment creator. Among the sectors of the economy, industry, Agricultural and construction, are identified as key factors for job opportunities.

Conditions of countries show whether human capital is considered as an investment or consumption good? This issue is of a great importance in oil producing countries and many researchers believe that human capital has a minor effect on economic growth and it is considered as a consumption good in this group of countries.In this paper it is tried to test the short and long run Granger causality between human capital and the growth of GDP and at the same time between human capital and the growth of non-oil GDP in Iran during the period of 1340-1380. According to Vector Error Correction Method (VECM) results, there exists a bilateral relationship between human capital and non-oil economic growth in short and long run, hence, human capital is considered as an investment capital. But the derived results on the relationship between human capital and economic growth shows that there is no Granger causal relationship between the variables in short run, whilst, the relationship is bilateral in long run. So, it is concluded that the human capital is considered as consumption good for the Iranian economy in short run and investment good in the long run.

In this research we have studied the relationship between labor productivity and their compensation simultaneously. In fact, we have estimated the effects of labor productivity and the effects of productivity on wage simultaneously. The results of estimated equations show that there is a positive relation between wage and labor productivity, and a positive effect of educated workers and skilled workers on productivity and wage, as well. But the effect of educated workers on productivity is much higher than their effect on wage, and in addition, to that, the elasticity of the productivity of educated workers, is higher than the elasticity of wage. Hence, there is a gap between productivity of educated labors and their wages. To consider the factors affected on this gap we use another model. The results of estimated model show that the effect of educated workers and factories with private ownership have a positive effect on this gap, but factories with government ownership has a negative effect on wage- productivity gap.