Journal of Economic Research and Policies
Year:2013 | Volume:21 | Issue:65|Papers Count:16

Low inflation is the prime purpose of inflation targeting; but if low inflation gained at the cost of low output growth, then inflation targeting may not consider as a successful policy. Based on an adaptive dynamic model, this study investigates the impact of inflation targeting on the growth rate in non-industrial countries during 1985-2010. The research sample consists of 18 countries which have adopted inflation targeting and 26 non-inflation-targeting countries as a control group. LSDVC, a dynamic panel estimator, employed to estimate the research model. The results show that inflation targeting has no significant impact of on the economic growth rate.

Nowadays improving business environment is an effective method in achieving more economic growth and creating employment. Judicial system is one of important components of business environment so it is necessary to study its effects on the economic growth as one of important index of the business environment. This study using pooled data, evaluates the relation between judicial system and economic growth of D8 group countries during 2004-2009. Our Results suggest that the increase of litigation procedures, time and expenses leads to reduction of D8 countries economic growth. According to the results for every one percent decrease in judicial system efficiency, economic growth of these countries decreases about 1.95 percent. With adding institutional quality index to the model the negative effect of time factor on the economic growth is also confirmed

Nowadays it seems that studying the variables that are indicative of a stable political environment in models of economic growth, especially for developing countries that suffer from some degree of political instability, is necessary. This paper examines the relationship between political stability and economic growth in Iran during 1974-2007. This paper defines eight political stability or instability variables. In a five-variable model of the economic growth, two variables of political instability and three variables of the political stability are used. This model could also tested by new indices. The results show that in group A which is a combination of political and citizenship freedom, these two indices weigh equally but in group B which is a combination of three variables, private investment have greater intensity than trade freedom and tourism section. In the next years the effect on this group will increase and this is nature of economical factors.

Investors invest in variety of markets with different time viewpoints. They aim to find the best investment opportunities among the various markets. This study surveys about various available markets in Iran. Then, the average of returns, performances and finally correlations between these markets will be studied in the short-term (three months), medium-term (one year) and long-term (five years) periods. The populations of present study are securities, land and housing, gold coins, currency (US dollar) and bonds markets. The results of this study indicate that there is a little difference between the average returns of different markets in the short and medium terms period and bonds have better performance during short and medium terms period while they have very low risk. But in long-term period land and housing are the best among markets, either in average of returns or performance. The lowest average of return and the worst performance in all terms belonged to the US dollar.

Modern human, after severance from prophecy and spirituality, tried to organize its affairs using reason as the only epistemic instrument and thus based a scientific method on it. So in economic realm, human was introduced as an individual separated from the society and relied on the rationality in which self-interesting and ideality optimizing was the only decisive factor in decision making. In a religious standpoint, however, rationality separated from the prophecy is not accepted and only in the framework of enriched prophetic thoughts and in mutual interactions in order to comprehend the prophecy, rationality can guide human into his supreme objectives of life. In this regard, “justice” is the objective of life, towards which human should move using “reason” instrument and in the bed of the “spirituality”. This article aims to introduce structural aspects of epistemology extracted from religious basis which determines behaviors of rational homo economicus and its behavioral constraints.

This paper introduces a suitable model for predicting the financial distress of the listed manufacturing companies in Tehran Stock Exchange market during 2005-2009. Besides the important financial ratios for predicting companies’ financial distress, this paper uses companies’ efficiency variable, which can increase the accuracy and predictive power of the model, as a predictor variable. At first, Data Envelopment Analysis (DEA) is used for calculating the efficiency index of the listed manufacturing companies in Tehran Stock Exchange market during 2005-2009 and then efficiency index results, besides other financial ratios, were used as a variable for predicting the financial distress. In proposed method, DEA is used as a tool for evaluating input-output efficiency of every company. To evaluate the influence of efficiency as a predictor, 50 manufacturing companies’ data that have accepted in Tehran Stock Exchange market is used. With the use of statistical test, the variables which have more power in differentiating healthy and distressed companies, have selected. Then, using logistic regression model in two forms (with or without efficiency variable), companies distress is predicted. The results of the research show that using efficiency variable in distress predicting model, increases the prediction accuracy of the model.

This study uses panel data to investigate whether components of governance significantly affect the unemployment growth in both developed and developing countries over the 1996-2010 periods or not? Therefore, in order to test the research hypotheses, after doing the static test of variables, the generalized method of moment (GMM) employed to estimate the model. The results show a statistically significant negative effect of the governance (Except transparency, accountability and the quality of regulatory rules in developing countries) on unemployment growth in both developed and developing Countries. These findings indicate that improving each of the components of governance could cause positive changes in reducing unemployment in both selected developed and developing countries.

This paper examines the level of cardinal welfare influential factors on the welfare changes in Iran. The Sen’s index, both in Pareto and non-Pareto states, is used to evaluate the level of cardinal welfare and in order to evaluate the macroeconomic variables effect on the welfare changes a fuzzy least-squares regression model (FLSR) is used. The findings indicate that the welfare level index increased about 4.8, 3.1and 2.7 percent during 2002-2007,  1997-2001and 1992-1996 respectively. According to the findings, the highest level of social welfare improvement in Iran has occurred during 1997-2007. The results of the fuzzy regression show that the unemployment rate, inflation rate and Gini coefficient have an inverse relation with the cardinal welfare in both Pareto and non-Pareto cases while the literacy rate and government expenditures have a positive relation with the welfare. The findings also imply that there is a positive relationship between economic growth and welfare level in Iran.

This study investigates Iran’s stock market by a non-Gaussian distribution function. To estimate this distribution function, Bayesian methods and Markov chain Monte Carlo simulation technique is used. Tehran stock market daily data during August 23, 2002 to February 19,  2011has been analyzed in this study. The results confirm the existence of a non-Gaussian distribution with a right skewness and fat tail sequence. Therefore, an unexpected crisis in the Iran stock market could not be ignored. The results also confirmed the hypothesis of asymptotically stable Distribution.

The imaginable essences around the world are either objective or subjective that rely on original objective concepts. In this regard some phenomena neither exist in objective world nor in subjective concepts, and only a falsified fact is what exists. Money -as a human’s innovation- could be an objective essence in commodity or a subjective concept (fiat money). Furthermore money could be forged from ex nihilo money creation. This paper compares western and Islamic economists’ viewpoints about subjective essence of money and credit. The western approach emphasizes on function of money while Islamic attitude mainly based on identity of money. So the difference between their attitudes towards money essence and function, leads to different entrance into the money concept.

Proper functioning of capital markets has a particular importance in economic development of each country. Since the efficiency of capital markets represent its function, the aim of this study is to discuss weak level of market efficiency in the Tehran Stock Exchange, using a technically advanced method and a new approach. The stock markets may be in the different stages of development; so models with stable and sustainable parameters could not describe different degrees of market efficiency overtime. Hence, examination of weak form efficiency alone would not enough. This study using time varying parameter GARCH model and the weekly data of TEPIX during March,  21of 2001 up to June 21, 2010, dynamically analyzes the efficiency of Tehran Stock Exchange over time. According to the findings of this research, after 2003 some signs of slow and gradually movement towards efficiency improvement is felt.

One of the most effective tools for risk coverage in catastrophic events which widely used in the world is Catastrophe bonds. The purpose of this paper is to determine the optimal expected rate of return for investors of these securities, so that they become attractive for them. This paper uses fire insurance data during 1949-2009, and then applies the Peaks over Threshold (POT) method for measuring the catastrophe bonds value at risk. The u threshold has been selected with using normal power approximation, and the difference between it and the VAR higher than this threshold has been considered as catastrophe bonds risk. Then, considering the alternative investment opportunities such as the Tehran stock exchange and gold and real estate market, using the Sharpe ratio we determine the these securities optimal expected rate of return. Each of these investment opportunities risk is calculated based on the multivariate GARCH model. The results show that the expected rate of return on these bonds must be at least 29.32%.