JOURNAL OF SUSTAINABLE GROWTH AND DEVELOPMENT (THE ECONOMIC RESEARCH)
Year:2012 | Volume:12 | Issue:3|Papers Count:10

One of the main inputs in manufacturing sector of Iran is fossil fuels with prices much lower than prices elsewhere in the world which are offered to producers and consumers. This accounts for a large share of subsidy payments allocated to different sectors of economy. The effect of subsidies on energy costs and prices of goods and services incur complex changes on the economy through allocation of resources. In this paper, using the computational general equilibrium model, effects of removal of fuel subsidies on production changes, cost and price in the Khorasan Razavi province has been studied. The results show that the elimination of subsidy on fossil fuels increased production, cost and price Indices. The highest growth rate of production and cost indices is in the gas sector and the highest growth rate of price index is in the oil sector.

Thermal power plants consume near to 50 billion cubic meters of natural gas each year. So, optimization of power plants in terms of fuel consumption has become an important issue because of economic values and environmental effects. More than 50 percent of electricity is produced by CCGT and SCGT. In addition, CCGT efficiency is much higher than that of SCGT. So, in this paper these technologies are compared. The outcomes show benefits over costs ratio is affected by fuel price and utilization time. In subsidy prices (before energy price reform), B/C ratio of this substitution is less than one. If fuel price increases more than 500 Rials per cubic meter, using CCGT is more economical than SCGT for mid load power plants. If fuel prices are more than 1300 Rials per cubic meter, B/C ratio will be greater than one in any utilization time. But this ratio is not greater than one for all cases. If all SCCTs are substituted with CCGTs, yearly natural gas consumption will reduce near to 3.5 billion cubic meters. These are 7% and 2.5% of yearly fuel consumption in power plants and total yearly natural gas consumption respectively.

Performing duties and offering decent services to citizens by municipalities, calls for supply of credit and financial resources. During the last two decades, revenues generated by purchasing surplus density or in other words, revenue from granting rent licenses to urban lands has played a central role in providing income for the metropolis municipalities of the country. Financial dependence of municipalities on this source of income and lack of reliable and sustainable sources of revenue at least to meet the permanent costs, disrupt the medium and long term financial budgeting and planning of municipalities. Considering inefficient and less rational methods and illogical density sales, necessitates more efforts to be made to study income structure of municipalities and demands effective help to be provided to this pervasive and public institution by investigating the roots of rent seeking in this structure.A basic assumption in this study is that some income codes including sales densities influence the formation of the municipality rent in a large extent. Therefore, by using the statistical data in Isfahan Municipality, the share of different sources of income in total municipality revenues during the years 1983 to 2005 is investigated and the research hypotheses are analyzed. The results indicate that the income structure of Isfahan municipality is rather based on rent seeking than relying on economic potentials and structures.

The weak axiom of profit maximization (WAPM) is used to analyze the optimization behavior of 18 Iranian banks within 10 years (2000-2009). In general the banks in the Iranian economy can be divided into 2 groups, state and privately owned banks. Nonparametric nature of this test allows us to study the profit maximization behavior of the firms without the need for any assumption on functional form of underlying technology. The WAPM is checked under 2 assumptions: constant technology and nonregressive technological change. Although most of the banks violate the deterministic WAPM test, testing the stochastic WAPM with measurement error and believing in existence of at least 1 percent measurement error in data, show the behavior of the privately owned banks and one of the state owned banks is consistent with WAPM under nonregressive technological change assumption. Although the behavior of the state owned banks is consistent as well if one believes in 5 percent measurement error, the difference leads to this conclusion that performance of the state development policies and objectives by the state owned banks has been deviated from profit maximization behavior.

Economic convergence can be considered as one of the practical reactions of the countries to globalization process. Thus, selecting a union or regional trade group is one of the important goals in economic planning. Studying international business cycles and their transfer from one country to another can have a great impact on regional cooperation. Investigating the relationship between trade and business cycles can also offer a proper analysis of regional integration. In this paper, such convergence is studied after Iran’s presence in Shanghai Group as an observer member and efforts which are made to join it. Econometric method and generalized gravity model for the years 1996-2009 are used to find out if there is any business convergence between Iran and member states of Shanghai Group and if synchronization of business cycles is effective to business convergence. It has been revealed that there is no business convergence between Iran and member states of Shanghai and the business relations are divergent as well. It is also found out that there is a negative and significant relationship between synchronization of business cycles and convergence (divergence) of these countries.

Entrance of new firms in the industry, according to existing theories, prepares the ground for competition, evolution, growth and innovation that can potentially lead to growth and economic development. This will come true only if the new firms have the ability to survive in economic activity for a reasonable time and are not forced out of the industry in the early years of their entrance. Several reasons have been studied for the exit of industrial firms in the literature of industrial economics. It is believed that the level of industrial technology used by the firm at the early stage of its activities is the main and effective factor that determines the exit time of the firm. This paper is aiming at examining the effects of technology level on exit probability of the new firms in industrial economy of Iran during the years 2001 to 2005. Data of manufacturing firms is extracted from the censuses conducted by the Statistical Center of Iran and the technology level is determined according to OECD classification. Cox hazard model is used in this study to determine the exit probability. The results of this study show that the technology level of industry has had a meaningfully negative impact on the exit probability of new firms. In other words, the firms entering the industry with medium-and high-technology level have a lower probability of exit.

Achieving a high and sustainable economic growth has always been the main target of economic plans in different countries. Proving a positive relationship between financial development and economic growth by many studies has convinced the researchers to study the effective factors on the growth and development of financial markets. Inflation is one of the main factors that have a great impact on the countries’ financial development. So, the focus in the studies has mainly been on explaining the form of relationship between inflation and financial development. In this paper, the relationship between inflation and financial market development in Iran during 1978 to 2007 for the money market and during the summer of 1999 to spring of 2008 for the capital market has been reviewed. Econometric model of this research has been specified according to Boyd, Levine and Smith model (2001). Firstly, a simple linear model is used for controlling other economic factors that may be correlated with financial market performance. Then, a threshold regression is handled for explaining the nonlinear relationship between inflation and financial market development. In this model, different thresholds that limit inflation are considered. Conditional least squares method (CLS), is applied for estimating the model. The threshold limit for inflation has been determined based on the minimum error sum of squared criterion. The results of the estimated model indicate that a negative relationship between inflation and financial development indexes of money market. This positive relationship also exists between inflation and stock market development indexes. In the same way, the output of the estimated models has shown that in the some domain of inflation, the negative relationship between inflation and financial development indexes of money market is not significant. In addition, the results of the estimated models revealed that there is no a threshold limit for the impact of inflation on the stock market.

The relationship between privatization and economic growth is the main focus of this research. A system dynamics approach and theoretical relationships in macro economics to growth patterns is used to study the impact of privatization through stock market on economic growth in Iran. The output calculation is done by human capital indicators such as the cost of investment in research and development, life expectancy, the rate of education and standard of living which are regularly published by the United Nations Organization. For estimating the rate of privatization, private investment and demand for stock, the statistics are provided by the Central Bank of Iran, the Organization for Privatization and the Stock Market Organization. Using a system dynamics approach to macroeconomics and the above-mentioned indicators the interaction and relationships between privatization and economic growth is explored in this paper. This approach which was firstly introduced by Forrester in 1973 can potentially improve and reform the unsuitable monetary and fiscal policies. In this regard the VENSIM and econometrics software packages are applied to simulate the results till the year 2020. Moreover, the economy is divided into many sections as stock market, investment and production. The results indicate that the rate of privatization in the stock market has a positive effect on economic growth. Finally, it is believed that more attention to private investment can result into increase in economic growth.

The assumption of a linear relationship between export and economic growth in previous investigations may lead to invalid inference if the actual relationship is nonlinear. In present study the relationship between export and economic growth in economies of Caspian Sea border countries (Azerbaijan, Iran, Kazakhstan, Russia, and Turkmenistan) is explored with emphasis on the effect of nonlinearities on the causal relationships. Results of study show that nonlinearities exist in the dynamic relationship between exports and GDP growth. Nonlinear smooth transition autoregressive (STAR) model results suggest that nonlinear Granger causality flows from exports to output growth and vice versa. Predictive accuracy tests further confirm the appropriateness of the nonlinear models over the linear model specification.