JOURNAL OF SUSTAINABLE GROWTH AND DEVELOPMENT (THE ECONOMIC RESEARCH)
Year:2013 | Volume:13 | Issue:2|Papers Count:10

The measurement of multidimensional poverty in 22 districts of Tehran is the main goal of this research. Studying human deprivation regarding basic needs i.e. health, nutrition, education and political freedom seems essential due to existing shortcomings of income-based poverty measurement approach. Here, we measure multidimensional poverty in terms of four attributes (income, housing, education and public health) using information theory approach developed by Maasoumi and Logo (2006) model. First, we calculate single-dimensional poverty based on each attribute. Then, according to difference in levels of substitutability among attributes we measure the absolute poverty using aggregate poverty line approach. The results show that the poorest districts of Tehran are district 19 in terms of income approach and districts 19 and 17 in terms of education and housing, respectively. The worst situation regarding public health belongs to district 16. The highest and the lowest multidimensional poverty rate were observed in districts 4 and 1 respectively. Furthermore, if substitution coefficient among attributes increases, then the multidimensional poverty rate will decrease. About 63 percent of Tehran population is of relative deprivation.

There have been few studies working on effects of financial repression policies on Iran’s economic growth. Considering the huge share of agricultural sector, we have been trying to fill this gap by the help of time series data from 1962 to 2007 on agricultural GDP, unproductive government expenditure, human capital, industrial price index, political instability, and financial repression measures. Results show that controlling the bank reserve requirement ratio as a proxy for financial repression has negative effect on economic growth of agricultural sector. This indicates that reducing controls on this parameter will help government to achieve higher rate of growth.

The estimation of Tobin’s Q Investment function is the aim of the present paper. One of the most important challenges of investment for a firm is finance. In the real world, since there is no perfect capital market, the costs of financing through internal and external resources are not equal and friction problem occurs in investment decisions. In this paper, a dynamic investment model is estimated in context of Tobin’s Q theory. This model accounts for 3 identifiable financial frictions, i.e., convex costs of issuing equity, overhang from outstanding debt and collateral constraints. The model is estimated with reference to capital and financial markets in Iran based on Hennessy et al (2007) approach using panel data of 19 companies during 2000-2009. The GLS and GMM methods are used for estimating and comparing the models.

Traditional approach to the firm size and its growth rate is based on comparative statics analysis and it does not really deal with the dynamics of growth. This paper takes a dynamic approach to investigate the relationship between firm size and its growth rate for Iranian insurance firms during 2003-2009. The study applies two ways to verify the validity of Gibrat’s law in Iranian insurance industry. First way is to consider the independence of two important attributes of firms including firm size and growth rates. The second way is based on panel regression estimation. The results of the study reject the validity of Gibrat’s law and indicate the fact that small firms grow faster than their larger counterparts.

The statistical data of Tehran Province shows that the ratios of output and employment of service sector to total provincial output and employment are 57 and 63 percent in 2001, respectively. The aim of this article is to quantitatively explain the structure of service -based economy of province, using Input-Output Model and intersectional linkages by Eigen Vector method. So, the main question in this research is that can the usage of Eigen vector method rather than traditional methods like Chenery-Watanabe and Rasmussen methods evaluate more precisely the importance of provincial economic sectors on the basis of intermediate viability in the production process?For this purpose, first the Input-Output Table of “Tehran Province” for 2001 was estimated by AFLQ method, and then the importance of provincial economic sectors was measured in terms of forward and backward linkages by Chenery-Watanabe, Rasmussen and Eigen vector methods.The results show that Eigen Vector Method can explain the importance of economic sectors of province on the basis of intermediate viability in the production process, in such a way that four key sectors are of dominant shares in industrial activities which their average share of demand out of total output is 45.5 percent, but ratios for 71 economic and service sectors are 76 percent and 84 percent, respectively. In general, results show that the nature of service sector in Tehran province is different from the services in modern economies. The main reason is that the service sector in Tehran is the consuming rather than producing sector.

One of the most important institutions and the special gift of divine religions including Islam is charity institution. Charity may overcome many social problems like poverty and disarray of the income and expenditure. This research is intended to investigate the factors influencing charity and the charity function behavior according to the teachings of Islam and to estimate empirically charity function in Iran. Regarding theoretical and empirical studies on religious expenditure and Islamic taxes; and considering Islamic rules and statistical limitations, the selected explanatory variables are income, wealth, age of householder and religious capital. The charity function is estimated using a panel data consisting of provincial data during the years 2000-2007. The estimation of an exponential charity function shows that charity is an increasing function of provincial per capita income, wealth and religious capital. Using direct data on charity and entering religious capital and wealth as effective factors on charity are of innovations of the paper which differentiates current research from the other studies.

In this study, we survey the effect of increase in energy carrier prices on Iran’s economic sectors using input - output (I-O) table of energy in 2006. This investigation is done in two stages including direct and indirect effects and two scenarios. These scenarios consist of a) the price of energy carriers adopted in 2010, and b) prices based on forecasts of the International Institute of Energy. Calculations of the first scenario and the first stage (direct effects) indicated that the brick and cement industries and transportation, warehousing and telecommunications services have been affected by 138, 86 and 65 percent in price increases, respectively. Also, the highest growth in product prices in the second scenario obtained in brick, cement and ceramic and tile industries by 473.68, 347.74 and 199.81 percent respectively. Furthermore, with defining maximum prices of energy carriers in the second scenario, the highest increase in marginal cost according to direct and indirect effects devoted to the brick, cement and ceramic and tile industries equivalent to 772.54, 599.9 and 431.52 percent respectively. These industries ranked in the first to third places due to increase in product prices.

Banks as important financial institutions have drawn attention of economic researchers because their impacts on various economic sectors. Despite positive role which banks play, they cause economic instability due to providing services particularly intermediary ones, so that most of economic researchers consider banks as main cause of current financial crisis. With regard to role of banks in economic instability, this research pays attention to financial intermediary role of commercial banks as their main product on economic instability. In particular, this research tests the impact of commercial bank products on economic instability as the core hypothesis. The results show that commercial banks as financial intermediaries had negative impact on Iran’s Economic stability during 1981-2007.

Today, policymakers and economists use widely rational expectations (RE) in monetary, financial and regulatory policies to improve their country economic performance. In some of the pertinent models to these policies, expectations have been formed by assuming rationality and full information on economics. Indeed, economic agents have no perfect information about some parameters of these models. These unknown parameters can be estimated in the form rational expectations during learning process. In this research, the impact of government policies on the inflation rate has been modeled on the basis of rational expectations under learning process. Data has been gathered from Central Bank of Iran (CBI) and Iran’s economic development plans over the period 1989-2009. Results show that current inflation in the country originates mainly from economy structure and government policies, so share of public inflationary expectations is negligible. In addition, the learning process in Iran will converge to rational expectations, thus government policies for reducing inflation and increasing employment are inefficient. It is recommended that government adopt unanticipated and sudden policies to be effective its plans.