Monetary & Financial Economics

Abstract Abstract Iran Economy has experienced monetary shocks and rising inflation , in recent years. For this reason, it is expected that monetary shock has a positive effect on inflation. So, the paper studies impact of monetary shock on economic growth and inflation of Iran. The DSGE approach based on New Keynesian School is used to examine the impulse response functions and calculating the endogenous variables moments. To make compatible the model with Iranian economy we take in consideration the price stickiness, oil income, government and central bank balance, and the roll of business banks. Data of the period of 1973-2010 are sourced from CBI. Results indicate that technology shock increases the non-oil production and decreases the inflation. The effects of monetary and oil shocks on real production and on inflation are positive. On the other hand technology and oil shocks increase the economic growth, but monetary shock has no effect on growth.

Abstract Introduction Financial markets development is one of the major factors in economic growth. According to the literature, financial section could affect economic growth in two ways: enhancing resource allocation and hastening technology development. This study pin out the first way, i.e., the resource allocation. To this end, this study tries to get an optimized credit allocation between oil-related and non-oil sections. Iran’s agriculture part is one of the areas that can have an important effect on the growth of country’s economy. Concerning this, variables that can increase value added agriculture have been concentrated on and the government is supporting them. One of these policies is granting loanable facilities from specialist banks to the agriculture part, which was in the specialist banks agendum during recent years. This study divides GDP to oil-GDP and non-oil GDP and uses GDP growth as a proxy to economic growth. After recognition of the importance of bank credit through optimizing credit allocation between oil and non-oil sections, it turns to clarify the issue in the subsection. Results show that bank credits are more efficient in non-oil section and also the agriculture subsection. Theoretical Framework Greenwood and Jovanovic (1990) developed a theoretical model to find that the impact of financial development on economic growth is dependent on the transitional cycles in the economy. Austrian-based credit cycle theories (Hayek, 1933, 1935; von Mises, 1912) and capital-based macroeconomics (Cochran, Call, & Glahe, 1999; Garrison, 2001) generally argue that financial development and credit expansion, especially through money creation, may cause overinvestment problems that lead to unsustainable economic growth. The economic growth, especially in small oil basted economies may experience larger fluctuations according to the credit boom explanation of the business cycle (White, 2006). Thus, the relation between financial development and economic growth in small natural resource-based economies is a non-trivial question and yet to be empirically investigated. Several empirical studies, using macro and industry-level data, have concluded that the development of financial intermediation has a significantly positive effect on economic growth. King and Levine (1993) provided the most comprehensive empirical work where using cross-sectional data from 80 countries. They found a positive relationship between bank credit and economic growth. Efficient allocation of funds through financial institutions leads to economic growth. Other studies including Levine and Zervos (1998), Levine (1998), and Beck and Levine (2003) found similar results. Eschenbach (2004) reviewed the majority of empirical studies and concluded that the direction of causality between financial development and growth varies across countries, regions and even variables employed by these studies. Methodology Bayesian model averaging (BMA) is an empirical tool to deal with model uncertainty in various milieus of applied science. In general, BMA is employed when there exists a variety of models which may all be statistically reasonable but the most likely result in different conclusions about the key questions of interest to the researcher. As Raftery (1995, p. 113) noted, in this situation, the standard approach of selecting a single model and basing inference on it underestimates uncertainty about quantities of interest because it ignores uncertainty about model form." Typically, though not always, BMA focuses on which regressors to include in the analysis. The allure of BMA is that one can quickly determine models, or more specifically, sets of explanatory variables, which possess high likelihoods. By averaging across a large set of models, one can determine those variables which are relevant to the data generating process for a given set of priors used in the analysis. Each model (a set of variables) receives a weight and the final estimates are constructed as a weighted average of the parameter estimates from each of the models. BMA includes all of the variables within the analysis, but shrinks the impact of certain variables towards zero through the model weights. These weights are the key feature for estimation via BMA and will depend upon a number of key features of the averaging exercise including the choice of prior specified. These difficulties made us to apply Bayesian Model Selection (BMS) to conquer BMA model problems. BMS uses the Markov Chain Monte Carlo (MCMC) samplers to gather results on the most important part of the posterior distribution. The MCMC sampler randomly draws a candidate model and then moves to this model if its marginal likelihood is superior to the marginal likelihood of the current model. In this algorithm, the number of times each model is kept will converge to the distribution of posterior model probabilities. There are two different MCMC samplers to look at models within the model space. These two methods differ in the way they propose candidate models. The first method is called the birth-death sampler. In this case, one of the potential regressors is randomly chosen; if the chosen variable is already in the current model Mi, then the candidate model Mj will have the same set of covariates as Mi but drop the chosen variable. If the chosen covariate is not contained in Mi, then the candidate model will contain all the variables from Mi plus the chosen covariate; hence, the appearance (birth) or disappearance (death) of the chosen variable depends on if it already appears in the model. The second approach is called the reversible-jump sampler. This sampler draws a candidate model by the birth-death method with 50% probability and with 50% probability the candidate model randomly drops one covariate with respect to Mi and randomly adds one random variable from the potential covariates that were not included in model Mi. Results & Discussion After decomposing true prior to several economic sections, it is turned out that non-oil section of Iran’s economy has the potential to have more growth than oil related section and also from the non-oil sections, that is, the agriculture and industrial sub-sections , the agriculture sub-section was optimizing the credit resources more efficiently than the industrial one. This study also determines 5 models, accompanied by the highest posterior probability, that place in Occam's window and Lucas-Uzawa approach is determined as the most possible growth model to the Iran’s economy. Conclusion & Suggestions The main conclusion of this study highlights the agriculture subsection and the non-oil economic section for having better responses to bank credits and showing more growth. Our conclusion was based on a quasi-Bayesian approach because of the lack of the degree of freedom; in adition to the regression that was implemented just for the economy of Iran. Therefore, future studies, to conquer the lack of the degree of freedom, could apply a panel model among resource-based economies and survey the role of financial development, specifically bank credits.

Abstract The gap productivity in tradable goods between two countries is a factor of fluctuations real exchange rate and it is called Balassa–Samuelson effect (1964). The BS (Balassa–Samuelson effect) idea originates from inflation gap between the U.S.A. and Japan in the 1960s and the attempts for understanding how much of the inflation gap between U.S. and Japan was due to the productivity gap between tradable goods in two countries. If total factor productivity in tradable goods in country A is more than country B, value of the national currency and deviation of Purchasing Power Parity (PPP) will increase in country A. This effect explains why the non-tradable price of goods in countries with a lower productivity is less than other countries. This difference of price makes a deviation of PPP. For example, annual average inflation rate during 1955-1970 in Japan was 5.4 percent. In the same period, annual average inflation rate in the U.S.A. was 2.6 percent. The gap of inflation rate between Japan and the U.S.A. had been 2.8 percent (Imai, 2010); consequently, the value of Japanese currency increased, too. When we assume that there are two goods in the economy, namely, tradable and non-tradable goods, then, labor is a factor of production. If productivity of tradable goods in Japan is more than the U.S.A., then the price of tradable goods in Japan should be less than the U.S.A., but it is not true because tradable goods are traded between countries and have a unit price in all countries. Based on profit maximization condition that is , when increases and is not changed in tradable sector, then, of tradable and non-tradable sectors will increase, because labor is mobile between tradable and non-tradable sectors. The result is the increasing price of non-tradable goods in Japan while the non-tradable price in the U.S.A. is constant. This difference in the price of non-tradable sector between Japan and the U.S.A. is explained deviation of PPP in Japan. In this paper we estimated BS effect in Iran. Total factor productivity in Iran is less than the U.S.A., then, part of deviation PPP in Iran is the productivity gap between Iran and the partner’s countries with which Iran trades. Literature Review of Balassa–Samuelson Effect We assume two countries 1 and 2, two sectors tradable and non-tradable and define the following notation: : Productivity of non-tradable goods in country 1. : Productivity of non-tradable goods in country 2. : Wage rate in country 1. : Wage rate in country 2. And : price of non-tradable goods in 1 and 2 countries. And : price of tradable goods in 1 and 2 countries. Assumptions: 1. Same productivity in two countries and equality to unit: 2. Labor is full mobility between tradable and non-tradable goods within country. 3. Unit Price Law in tradable sector: Now we can write for country 1: And for country 2: Then Divided Eq.6 to Eq.7 Now if , then , and it is BS effect. In other words, higher non-tradable price in country 1 is due to higher productivity in tradable goods in country 1. This is one of the causes of PPP deviations. When productivity in tradable sector increases, wage is increased and labor will move to tradable sector. Then non-tradable wage increases up to equilibrium in two sectors. In this situation, price of non-tradable goods increases and we have deviation of PPP (Hamano 2012(. Conclusion According to Purchasing Power Party (PPP), Law of Unit Price, and assuming no transportation costs for tradable goods, the price of them in all countries is same, but non-tradable goods have a different price in other countries. The Balassa–Samuelson indicated that the different price of non-tradable goods is due to the productivity difference in tradable goods between two countries. Then, a part of inflation gap or deviation of PPP (condition of fixed exchange rate) is due to the productivity gap of tradable goods in two countries. Note that the inflation gap between two countries is due to several factors and one of them is Balassa–Samuelson Effect. This paper estimated BS effect in Iran with comparing inflation rate of Iran and the U.S.A. during 2002-2011, and the nominal exchange rate (Rials/ U.S. $) is fixed. According to Emai (2010), the gap of inflation rate between two countries is the decomposition of productivity gap of tradable and non-tradable goods in two countries, and then we estimate BS effect. We assumed that the industrial and service sectors are a proxy for tradable and non-tradable sectors. The result shows that, BS effect in Iranian economies had been -2.1 percent during 2002-2011. This means that, the real devaluation of Iranian Rials as a 2.1 percent during 2002-2011 is reasonable, while in fact, Iranian economies show that, both real devaluation of Iranian Rial and Iranian Rial against U.S.'s $ real appreciation during 2002-2011 was about 13.6 percent (annual average gap inflation rate between Iran and U.S.). In other word, when annual average inflation rate of U.S. at the same time was 2.2 percent and BS effect was -2.1 percent, the annual average inflation rate of Iran was 0.1 percent which is considered reasonable in the same period of time. The final result of this paper is that high inflation rate in Iran (the deviation of PPP in Iran) is not due to the productivity gap between Iran and other countries such as the U.S. Key word: Balassa–Samuelson effect, Purchasing power parity, Productivity gap, Tradable and non-tradable sectors JEL: D24 ؛ E31 ؛ F31 ؛ O53

Abstract For many years, developing countries were neglecting the importance of service sector because of this viewpoint that only investment in industrial infrastructures can accelerate development. During the recent centuries, investigating share of services in the GDP of developed countries and comparing it with its relevant quantities in the GDP of developing countries, showed that progress and development has a direct relationship with growth of service sector (Singh, 2006). In spite of the notable importance of service sector in international economy, our country could not yet match itself with changes of this sector to use its advantages. It seems that dominant thought among decision-makers and the public about service sector is equivalent with speculation that damages production (Ministry of Economic and Assets Affairs, 2010). Although the importance of service sector is confirmed, no studies have been done for recognizing the effects of economic policies on growth of this sector. Monetary and fiscal policies are among economic policies that are widely used for achieving economic growth. There are different views about effectiveness of monetary and fiscal policies in the economic literature, so before recommending them, we should investigate theirs effect. Theoretical Framework Governments persistently make efforts to attain their goals such as increasing employment, growth, development and welfare, or decreasing inflation and poverty, through economic policies and instruments (Hashemi Dizaj, 2007). Economic policies are usually divided to two categories: the first type is known as "Direct Policies". Direct or demand management policies are generally monetary and fiscal policies. The second type is "Indirect Policies", they are generally trade and income policies (Ragoobur, 2010). Taxes, government expenditures, and transfer payments are instruments of a fiscal policy. Monetary policy’s instruments are: reserve requirement ratio, rediscount rate, open market operation, and qualitative instruments (Hashemi Dizaji, 2007). Changes in policy instruments affect the production of various sectors including service sector, so it leads to growth of service sector’s production. To illustrate the mechanism through which monetary and fiscal policies affect the production, we consider an example of expansionary fiscal policy. By applying an expansionary fiscal policy, the demand for goods and services will increase. This causes moving of IS and AD curve to the right. At previous prices, the economic system will face excess demand that pushes prices to enhance. Enhancement of prices has three effects: 1) Wealth effect: because of the increase of prices, real wealth of consumers declines. Therefore, consumption of the public decreases, too. So IS curve turns to a little to the left. 2) Real money balances: higher prices decrease real money balances (MS/P) so LM curve moves to the left. 3) In the labor market, the demand of firms for labor force increases due to price enhancement of their products. On the other hand, supply of labor decreases. Because we assume incomplete money illusion, finally employment will rise. It is clear that, in the final equilibrium all variables increase including production. Methodology In this study, the effects of monetary and fiscal policies on production of service sectors were investigated by ARDL model. For examining the existence of long run relationship between variables of the study, bounds test procedure introduced by Pesaran et. al. (2001) was used. In this procedure, they obtained two critical values. One of them through the assumption that all variables are stationary or in other words, are I(0), and the other one, by considering that all variables are stationary By differencing the first order or let's say, are I(1). We estimate an Unrestricted Error Correction Model (UECM) presented in equation (1). Where: SE is value added of service sector; GR is government expenditures; M2R is liquidity. We compute a critical value by examining this hypothesis: C4=C5=C6= 0. Then it will be compared with the critical value of Pesaran et al. When the critical value (absolute quantity) is more than that of Pesaran et. al., we conclude that there is a long run relationship between variables; otherwise, the existence of long run relationship will be rejected. We estimate through the following ARDL model: Results and Discussions: After checking stationary of the variables and existence of long run relationship, short and long run and short run dynamics (ECM ) were estimated. Estimated Results show that, there is a long run relationship between the variables of the study. The effect of monetary and fiscal policies on production of service sector is significant in both short and long run. Comparison of short run and long run coefficients reveals that, coefficient of monetary policy is more than coefficient of fiscal policy in long and short run. Furthermore, results of ECM indicate that any deviation from long run equilibrium is adjusted in 0.75 of one period. Conclusions and Suggestions The results of this research show that monetary and fiscal policies have significant effects on the production of service sector in both short and long run. Therefore, we can use these policies for achieving growth of this sector. Furthermore, in this regard, monetary policy could play a more important role because it is more effective than fiscal policy. Since coefficients of both monetary and fiscal policy in the long run are more than their relevant quantities in the short run, policy makers should be patient when they implement these policies. Because these policies need time for revealing their full effects.

Abstract The financial crisis of 2007-2008 and the cost of fiscal policy reform, increasingly revealed the importance of discussion on "government debt sustainability" in the economic literature. Accordingly, this paper examines government debt sustainability in the form of a Fiscal Reaction Function (FRF). To do so, a fiscal reaction function has been estimated using a Johansen Juselius cointegration method in Iran for the period 1971-2014. The results showed that the government's reaction was sustainable to the three types of debt (i.e., debt to the central bank, debt to domestic banks and non-bank financial institutions, and foreign debt). However, the small regression coefficients indicate a weak sustainability. In other words, as the public debt/GDP ratio increases, government does not respond by improving the primary balance. This problem, due to the impact of public debt on long-run economic growth through various channels can be an alarm for decision and policy makers. Also, findings confirm that fiscal policy in Iran is pro-cyclical. Therefore, it is recommended that, with the aim of creating a sustainable framework for fiscal policy, "debt sustainability" and "Business cycles" be considered as main variables in the objective function of fiscal policies in Iran. Methodology The issue of “fiscal sustainability” has taken on special importance in the aftermath of the global financial crisis. Although for fiscal sustainability is provided several definitions, almost all of these definitions are associated with fiscal policy. In a comprehensive definition, fiscal sustainability can be considered as a measure of fiscal dependence on the government's recent behaviors, compared to the last fiscal developments and changes in the macro-economic level. To empirically assess fiscal sustainability, the concept of “fiscal reaction function” can be used. Fiscal reaction functions usually specify, for annual data, the reaction of the primary balance/GDP ratio to changes in the one-period lagged public debt/GDP ratio, controlling for other influences. In other words, if the public debt/GDP ratio increases, government should respond by improving the primary balance, to arrest and even reverse the rise in the public debt/GDP ratio (Bohn, 1995, 2007). According to Burger, Stuart, Jooste and Cuevas (2011), the basic fiscal reaction function is in the following form: Where: B/Y= Primary Balance/GDP D/Y= Government Debt/GDP =Output Gap Government Debt/GDP is three types: Debt to the central bank/GDP (DCY) Debt to domestic banks and non-bank financial institutions/GDP (DOY) Foreign debt/GDP (DXY) Results and discussion In this section, we estimate fiscal reaction function using a Johansen Juselius cointegration method in Iran for the period 1971-2014. In the first step, the stationary of variables has been tested using the Ng-Perron and Lumsdaine and Papell tests. The results of stationary tests showed the four variables are non-stationary and only one variable is stationary. So the method of cointegration is a necessity. According to the results of unit root tests, fiscal reaction function has been estimated using a Johansen Juselius cointegration method. Johansen’s procedure builds cointegrated variables directly on maximum likelihood estimation instead of relying on OLS estimation. Finally, fiscal reaction function has been estimated as follows: Based on the estimated equation, it can be said that the government's reaction was sustainable to the three types of debt (debt to the central bank, debt to domestic banks and non-bank financial institutions and foreign debt). However, the small regression coefficients indicate a weak sustainability. Also, the positive coefficient of the output gap showed that fiscal policy in Iran is countercyclical. Conclusion The rapid build-up of government debt in an environment of financial instability and low growth has increased the need for an assessment of government debt sustainability. Accordingly, this paper examines government debt sustainability in the form of a fiscal reaction function (FRF). The results of the estimating Johansen Juselius cointegration method confirmed that fiscal policy was not sensitive to react to the accumulation of the government debt. Therefore, due to the impact of public debt on long-run economic growth through various channels, it is necessary that "debt sustainability" be considered as a main variable in the objective function of fiscal policies in Iran.

Abstract This paper investigates the role of the central bank and monetary policy in the occurrence of the business cycles in Iran’s economy. This is important since the effects of monetary policy on the business cycle and its dynamics are the main stage in understanding the role of financial markets in the economy. Therefore, in this study, using the quarterly data from, 1999-2013 the cycles in GDP and liquidity have been elicited (with the help of economic filters); then, using vector autoregressive model, it is shown that fluctuations in liquidity are leading the fluctuations in production. The most important and crucial issue among modern economics is the existence of commercial cycles or economic fluctuations. The emergence of such business cycles, which in many cases caused problems for the economies and created a period of unintentional inflationary or recessionary events which could itself lead to other adverse economic conditions. Consequently, it seems the study of this phenomenon and the causes of its creation as well as finding options to deplete those problems are the most concerning issues of economic policies in every country. Commercial cycles are fluctuations which are defined in terms of frequency periods of boom and recession. Economic activities usually consist of two stages, recession and boom. When production and employment decrease and lead to poverty, they reduce the welfare and lower the living level of people; hence, it means that economic activities are in recession. Additionally, when production and employment rise, it brings about welfare and increases society’s living quality; this means economic is about to get better or boom. Although, these cycles occur frequently, none of two cycles are similar to each other. During later decades recognition of causes, predictions and economic fluctuations are the most important issues of macroeconomic and policy making economists. Among commercial cycles, usually parameters like production, employment, real income and real sale level decrease and increase together. On the other hand, some economic parameters before empowering a cycle are considered as pioneer indices, which indicate the existence of an economic cycle in future. Among these parameters, we can name those that are cooperating in changing of money, credits, crucial prices, order volume in production parts, personal contracts, number of started buildings and number of working hours. It can be said that, a group of economists believe that economics essentially has a problem which for some reasons will lead to commercial cycles. On the other hand, another group of them believe that some external intruding will lead to the creation or at least increase of these cycles. According to the second group, economics essentially has stability and since the external intruding of government, banks, and other sources do not exist, economics will not experience any commercial cycle, and as a result, the essential and crucial question is whether it is possible to get rid of the cycles. Generally, we can study the reasons of growths in real volume of country’s economic activities in two aspects of changes in demand and supply. The considerable point is that, the existence of stability in a country’s economy could be useful in various aspects and essentially one of the duties of governments and planning systems is providing economic stability. Thus, with the recognition of fluctuation’s structure and cycles in economy, we should try to control and decrease the intensity of them. Severe economic fluctuations or cycles are natural, and instability growths in economy, households, and economic firms cannot make a bright prediction of future. In times of recession or moving towards a recession, unemployment has increased and production has declined, and some production units may even be out of business and prices are falling. What is important is to know what initially creates prosperity and then, after a period of economic activity, it will lead to slowdowns and stagnation. In other word, it seems that in economic cycles we must look for the reasons of appearance, duration, and power of these fluctuations. There are various theories and reasons which lead to commercial cycles in macroeconomic literatures. Some of these theories say that the origin of fluctuations and commercial cycles is in policies of the demand side. The theory of Keynesians, the monetary (Chicago School), and the theory of rational expectations and its subcategories, including the new classics (monetary branches) and the new Keynesians, are among these theories. According to some theories, commercial cycles are related to supply spectrum theory. One of these is the Real Commercial Cycle Theory (RBC), which argues that fluctuations and business cycles are explained by the volatility of real variables in the economy . Whether the central bank can pursue active economic stabilization policies and, on the other hand, whether anti-cyclical monetary policies can be effective in controlling business cycles is a great help for economic policy-makers and policy makers. The answer to these questions will be very helpful to economic regulators and central banks’ policy makers. Consequently, it seems that the recognition and understanding of commercial cycles will be the first step in retrieving the role of central bank, and as a result, they will be considered in designing stability policies. Based on the obtained results, on average, 23 periods are observed, with peak periods, the rate of liquidity change was about 9 months (6 months) from the peak of the level of economic activity. Results and discussion Variance Dissection (VD) The results of the dissection of variance in Table 10 show that in the short term (about three cycles ), the explanatory power of the growth of government expenditures from periods of stagnation and boom is higher than the explanatory power of liquidity growth, but, in the medium and long term, liquidity growth has a greater potential for expanding business cycles and periods of recession. Conclusion In this paper, we tried to answer the above question using a theoretical explanation and designing a self-regression vector (VAR) model in order to analyze the experimental effect of this relationship. Based on the results, it is found that, on average, using 23 cycles, the peak of interest rates was about 9 months away from the peak of economic activity. This could indicate that fluctuations and changes in the rate of liquidity growth as an indicator for monetary policy in the Iranian economy are one of the factors that trigger business cycles in Iran's economy. To evaluate the dynamics among the model variables, the action-response functions were used. The results reflect the negative reaction of the business cycle to inflation. In other words, the inflation rate has a positive and significant effect on the duration of the recession, so by increasing it by one percent, the length of the recession or the risk of withdrawal from this period will be reduced. Therefore, with rising inflation, the length of the recession in Iran will increase.

Abstract Introduction Achieving economic growth along with improving the distribution of income is always one of the main goals of economic development. In this regard, policy makers are the tools and policies that enhance the growth and distribution of income in a coherent way. On the other hand, it is expected that the insurance industry will be able to provide simultaneous access to economic growth and distribution of income, taking into account the function of risk distribution and its compensation, as well as its role in financial development. To test this hypothesis, here has used of the AutoRegressive Distributed Lag (ARDL) approach during the period 1975-2016. The results showed that the development of the insurance industry could provide simultaneous access to economic growth and income distribution in the short run. But in the long run, it will only lead to economic growth. However, in the long run, it could be reliant on human and physical capital for simultaneous access to economic growth and the distribution of income. Also, based on the error correction model, 88.2% and 68.1% of the non-equilibrium related to the non-oil per capita gross domestic product and Gini coefficient are adjusted in each period, respectively.  Theoretical framework In The second half of the 20th century onwards, especially since the 1970s, following widening the income gap between the poor and the rich as well as the development in public awareness, it has been emphasized on increasing the quality of life (Mehregan & Salarian, 2008:13). In general, classical and neoclassical economists believe that an uneven distribution of income can have a positive effect on the growth process, while others such as Mirdal and Sen believe that economic growth entails an improvement in income distribution and in fact considers the reduction of inequality necessary (Khodadad Kashi & Heidari, 2008: 153). However, if economic growth and improvement in income distribution are considered two essential components of economic development, there are three strategies for development (Sharifzadegan, 2007: 23-24): A) Growth then Redistribution (GTR): Accordingly, with economic growth and the creation of vast economic capacities and enlarging the size of the economy, the conditions for employment is automatically provided for all social and income groups, thereby achieving a balanced income distribution. B) Redilribution then Growth (RTG): In this strategy, comprehensive resources are mainly spent on proper distribution of income, and investment on economic growth and attention to it comes at a lower level, and practically undermines the social capacity of the community. Many experiences and studies show that in the long run, this policy will not achieve a balanced distribution of income or economic growth. C) Growth with Redistribution (GWR): This strategy emphasizes that income redistribution cannot work without relying on a booming economy. In this strategy, executive policies should be able to work both for economic growth and for income distribution. The development of the insurance industry with the aim of fostering economic growth and improving income distribution can also be considered as one of the policies of this strategy.   Methodology In this section, the following two econometric models are considered to examine the effects of the development of the insurance industry on economic growth and income distribution: (1)   (2)   In the empirical studies, the variable level of income is present in the income distribution model, but the present study assumes that the level of income of individuals affected by physical wealth (physical capital or CAPL) and human wealth and capital (skill, expertise, and education level or HCAP). Accordingly, the LHCAP and LCAPL variables are used in the income distribution model instead of the natural logarithm of the income level. The research models for the period 1975-2016 will be estimated using the ARDL method.   Result and discussion Because dynamic short-run interactions between variables are not considered in OLS method, the use of this method in estimating the long-run relationship does not necessarily yield unbiased estimation. Therefore, it seems reasonable that in such cases those models be considered that have short-term dynamics and thus make the model coefficients more accurately estimated. The ARDL method is a dynamic model that allows to estimate the long-run coefficients of the model with appropriate accuracy in addition to the cointegration test between variables (Nofersti, 2008). The main advantage of using the ARDL method is that regardless of whether the research variables have unit root in levels or some become stationary by one time differentiation, a long-run cointegration relationship between the variables can be obtained. Conclusion Achieving high economic growth coupled with improved income distribution has always been a major concern for policymakers in developing countries. In this regard, based on their historical experiences and those of other countries as well as the theoretical and empirical studies, countries prefer the strategy of Growth with Redistribution over GTR strategy or vice versa. On the other hand, insurance is expected to provide simultaneous access to economic growth and income distribution, given its functional role in risk distribution and compensation as well as its role in financial development. In the present study, this hypothesis was tested for the Iranian economy over the period 1975-2016 using the ARDL method. The results of estimating income distribution model as ARDL (1, 1, 2, 3, 3, 1) showed that insurance penetration factor variables had a negative effect on Gini coefficient immediately and with a one-year lag. Oil revenues also have an impact on the Gini coefficient similar to that of the insurance industry, with its effect initially positive and negative with a one-year lag. But human capital with a two- and three-year lag and physical capital with a three-year lag have a negative effect on the Gini coefficient. Also, the results of estimation of economic growth model as ARDL (2,1,2,2,0) showed that development of insurance industry has positive and immediate effect on economic growth. The variables of human and physical capital have a positive significant lagged and non-lagged effect, and business openness variables have a positive and significant effect on economic growth after one-year lag.  

Abstract Based on the list released by the international organization for standardization (ISO) on January 1st, 2014, there are almost 250 types of currencies in the world for product/service trade and financial flows. The most obvious types of currency are the US dollar, Canadian dollar, Euro, British pound , Japanese Yen, Switzerland Frank, Chinese Yuan, etc. (Evans, 2014). Exchange rate is determined by its supply and demand while the governments can affect it through different ways. The amount and nature of government involvement in the exchange rate markets define the exchange rate systems. In fact, the exchange rate systems are a framework for determination of the price. There are generally three groups of exchange rate systems including floating, fixed, and managed system. In the floating exchange rate system, the exchange rate is only determined by the market forces without the involvement of the government. The exchanges change continuously because the exchange supply and demand have volatility. In the managed exchange rate system, the exchange rate can be changed while the governments participate in the exchange markets to affect the exchange rates. In the fixed exchange rate system, the governments demand for stabilizing the exchange rates through participation in the market or regulating systems (Rittenberg, 2012). Theoretical Framework Selecting an appropriate exchange rate system is of great importance for an economy because it affects the exchange rate and other economic variables of a country (e.g. the general level of prices and production). Determination of the exchange rate system after the collapse of Bretton Woods system became more important because there was already a kind of fixed and somewhat adjustable exchange rate system in the countries. After the collapse of Bretton Woods system, the countries such as the petroleum exporting countries questioned which exchange rate system is more important for their economies. In such countries, the petroleum export was considered as a main factor affecting the exchange rate because this factor affects both export and government revenues as well as the exchange rate system in such countries. One of the important frameworks to select the exchange rate system was the exchange rate protective property. Based on this framework, each exchange rate system protecting the economy of the country against the entered shocks is appropriate for its economy (Komijani&Arabi, 2002). Methodology The main purpose of this study was to determine the framework exchange rate system for OPEC member countries during 1990-2015. By using the method and results of this study, the exchange rate markets and policymakers can select an appropriate system for their countries to have the minimum volatility for the exchange rate resulting in no negative effect on the economy of their country. In this study, the models of Argy, Multiple-criteria and decision-making were used to select the proper exchange rate system in OPEC member countries. In the first model, after explaining the Argy model and presenting six price and production functions for all fixed, floating, and managed exchange rate systems, Chow, Hausman, Breusch and Pagan, Heteroscedasticity of variance, and autocorrelation tests were performed by STATA software. Then, based on the data collected for 1990-2015, the parameters of the above six parameters were estimated by GLS method and the production and price values were calculated by Excel software. Finally, the loss function was obtained for each country and exchange rate system by calculating and adding the numerical value of production and price variance. Results and Discussion The results showed that the managed rate system was selected as an appropriate system for all OPEC member countries except Ecuador, Qatar, and Nigeria because the loss function value for this type of exchange rate system was less than the other exchange rate systems. The appropriate exchange rate system for all above mentioned countries was the fixed exchange rate system. As a general result in the studied period, the proper exchange rate system for OPEC member countries was the managed exchange rate system. In the second model, the analytical hierarchy model was used. so that, the factors affecting the evaluation and selection of an appropriate exchange rate system were categorized in three groups of fixed, managed, floating, and 33 sub criteria. The results obtained from by using the weight of qualitative data in Expert Choice software showed that the managed exchange rate system with the weight of 70.1% was the most appropriate exchange rate system and floating exchange rate system with the weight of 19.6 and fixed exchange rate system with the weight of 10.6 were respectively after the managed exchange rate system. In addition, in the managed exchange rate system, the export with the weight of  29.8%, general level of prices and production with the weight of  22.5, and economic efficiency with the weight of 13.3% were the most effective sub criteria for the managed exchange rate system. Conclusions and Suggestions As the results of both models indicated, the proper exchange rate system for OPEC member countries was the managed exchange rate system. Based on the important role of exchange rate system in determination of exchange rate and its effectiveness on macroeconomic variables and helping the policymakers to better select the exchange rate system, considering the managed floating exchange rate system is suggested.

Abstract INTRODUCTION Pension funds, as intergenerational financial institutions, should be able to finance individuals in old age and disability by accumulating the micro-savings of the insured and investing in them. Therefore, one of the concerns of the mentioned funds is how to invest the micro-savings of the insured in different areas. In Iran, pension funds under the Ministry of Cooperatives, Labor and Social Welfare play a significant role in the capital market and more than 53% of the daily value of the assets of these funds belong to the listed companies (47% of non-listed capital), which possess more than 13% of the total market daily value (stock exchange and over-the-counter).     THEORETICAL FRAMEWORK Minimizing portfolio risk, investors can obtain an efficient portfolio for a certain return. Continuation of this process leads to the development of efficient portfolios, called the mean-variance efficiency frontier. The following data are required to apply the Markowitz model: Expected return on stock i, denoted by E(Ri). The standard deviation of the expected return on ith stock, considered as an indicator for the risk of every stock, denoted by Si. Covariance, as an indicator of coordination between the return rates of different stocks, denoted by δij. METHODOLOGY  To determine the optimal portfolio, first the returns of the days in which the transaction did not take place were interpolated by MATLAB and interpolation method and a matrix of 1354 × 9 was obtained. Then, at a 15 percent confidence level, the normality of the time series of returns of each group of industries was investigated by Jarque-Bera (JB) test. Next, the Markowitz model was solved and the weights were determined for each stock in the optimal portfolio of the Social Security Pension Fund. Research data were collected daily for the period 2015:03:25 – 2020:09:21 from the website of the Financial Information Processing Center of Iran and the Social Security Investment Company. RESULTS & DISCUSSION  Findings show that for investment in the Social Security Pension Fund, among real portfolio, the Markowitz model portfolio and the VaR model portfolio, the Markowitz model optimal portfolio is better than the VaR portfolio and the real portfolio as it has the highest return-to-risk ratio. In order to optimize the investment portfolio, this fund should increase its investment share in the groups of pharmaceutical materials and products by 7%, investments by 2% and the base metals by 1%. It should also reduce its investment share in the groups of multidisciplinary companies by 3%, chemical products by 3%, cement, gypsum and lime by 2% and petroleum products by 2%. CONCLUSIONS & SUGGESTIONS Since the results of the study show that the proposed portfolio of this study based on the Markowitz model is optimal for investing in the stock industries of the Social Security Fund, it is suggested to the authorities and planners of this fund to change their existing investment portfolio to the proposed portfolio and especially increase their share of investment in the group of pharmaceutical materials and products as the Social Security Organization (TPICO Holding) has an advantage in this industry on a national scale and its development is consistent with the organization's strategies. It is also suggested that the Social Security Fund reduce the dispersion of investment in markets-industries and over-investment in company management as it has always posed a great risk to pension funds around the world.

Abstract The asset price bubble is the deviation of the asset price from its fundamental value. The price bubbles usually have common features. On one hand, providing excessive loans and facilities along with continuous raises in demand and asset price cause an inflation in price bubbles. On the other hand, the bubbles burst and the asset prices collapse because of abundant sales. Since many of the financial crisis arise from bursting bubbles of financial assets, exploring the bubbles behavior in these markets and the early detection for the prevention of adverse economic consequences is important. Generally, the correct detection of assets price bubbles is complex and difficult due to uncertainty in accurate identification of the fundamental factors and their randomness. Especially, if the bubbles were inherent and dependent on fundamentals, the correct specification of the bubble equation will be more difficult. Many of the methods used for testing the price bubbles, have been criticized for various reasons. In this line, the present study has used Sigma-Point Kalman Filter (SPKF) to measure the price bubbles in the non-official foreign exchange market of Iran during the period of 2002:04-2015:09, forming a nonlinear state space model. Methodology In this paper, to derive the state-space model, the presented value model with variable discount rates was used as a start point. After solving this equation, the asset price includes two components, the fundamental value and the non-fundamental value or the speculative bubble. By applying the transversality condition, we obtain no bubble solution. The fundamental value is affected by market fundamentals and is expressed as the sum of the asset’s expected future dividends discounted to the present time. But, if the transversality condition be violated, this equation is the only solution for main equation. The price bubble can be a function of fundamental factors. In addition, the relationship between the expected bubble and the current bubble values follow a nonlinear process. If prices and fundamentals have unit root, we can write the general solution in differences. Since the bubble is an unobservable component, we regard it as a state vector and estimate it in a state space model. In addition, because fundamentals and price are observable, we consider them as observation vectors in signal equation. We assume the fundamentals follow an ARIMA (h, 1, 0) process, where h is determined empirically. In the present study, we apply the Sigma Point Kalman filter (SPKF) for foreign exchange market in Iran. In this regard, we have taken consumer price index and real interest rate as fundamentals in nonofficial exchange rate of Iran. After specifying the state space model, this model is estimated using the maximum likelihood method. Then, we extract the bubble component using SPKF algorithm and by the MATLAB software. Results and Discussion In order to identify the series of foreign exchange market bubbles, we have followed the SPKF methodology to detach the bubble component from the fundamental component in exchange rate. Since price variables are nonstationary in level, but stationary in first difference, we are capable of separating the bubble component of a change in the exchange rate from its fundamental components. Regarding SPKF model estimation for the period of 2002:04 to 2015:09, most of the bubbles in exchange rate changes have been compressed at the 2012m09 so that about 61 percent of the exchange rate change can be attributed to the bubble component. Moreover, it can be seen that the non-official exchange rate of Iran in the 2000s had a very mild rising trend and slight volatilities. However, in the 2010s, at the same time with the intensification of economic sanctions, the decline in foreign exchange earnings and the rise in inflation, the exchange rate has experienced a significant growth. Conclusion In this paper, we applied a Sigma-Point Kalman filter (SPKF) to extract the bubble term from exchange rate changes in non-official market of Iran during 2002:04-2015:09.The results showed that the significant part of the exchange rate changes, especially during 2010s, have been due to the formation of price bubbles. In this framework, the highest share of bubbles in exchange rate changes has been related to 2012:10 so that about 61 percent of the increase in exchange rate in this month compared to the previous month have been attributed to price bubbles. Moreover, in 2015, the exchange rate bubbles have been very insignificant and the market value of the exchange rate has been close to its fundamental value.

Abstract One of the important goals of the governments is economic development with regard to which, policymakers of criminal justice system should evaluate all interventions which do not conflict with promoting economic prosperity. Criminal Justice policy makers support interests and goals to approve laws and programs in this Field and move towards them. In this regard, it is necessary to determine the extent of achieving the goal and measuring the costs incurred by the criminal justice system so far as to be selected the best way according to the supported interests and desired purposes. In other words, decision-makers in this field should always pass laws and run programs that can give these questions a convincing answer: Whether this law or program is effective in achieving the target? and is this program or law worth the intended purpose? To understand this, it requires that the programs and laws be analyzed in order to determine their efficiency and compliance with the stated goals and their value. In this way, the judicial system is one of the steps to be taken into consideration and its costs need to be estimated. The costs of the judicial system have been measured in other countries. Judicial system should accompany with the goal of economic development, with looking at philosophy of punishment and its functions, and consider evaluating its costs to create fields of development. Therefore, the present article measures the costs of the judicial system in drug offences (A look into Paragraph 6 of Article 8 Law Amending the Law on Narcotics) in Iran. Methodology Using an empirical method, in this research we have survey various types of judicial cost, their measures in comparison with budget and different methods to estimate them. Different types of cost in judicial system could be categorized into various, occasionally overlapping groups. For example, one could have direct and indirect costs; variable, Fixed and Step-fixed costs; average and marginal costs. In addition, there are two general methods to evaluate the expenses; the first one is named the top-down procedure while the second is known as the bottom-up approach. The top-down approach is most commonly used. This method produces accurate estimates in fields whose budgetary costs can be easily aligned with workload or output. Analysts often prefer this procedure because the calculations are relatively simple if detailed budget data is available. On the other hand, the bottom-up method is used to include all the costs related to a single unit by evaluating the direct cost of every interventions. Although, this approach requires detailed operational data, which is often not readily available, and the calculations are also more complex. Thus, this method needs more time and labor. However, it may provide a more accurate estimate of the resources being used. Bottom-up formula: Average time spent on unit output × Cost per hour = Average cost          In this research for estimating judicial system costs related to Paragraph 6 of Article 8 Law Amending the Law on Narcotics, data is collected through interviews at the supreme court in last year (2016) and to evaluate primitive costs of each case, data from Enghelab Court of Mashhad has been used as sample. Then, average cost was obtained using the above formula. Also with using the following equation, the total costs of these cases were obtained. Eventually, their ratio is measured by the budget. Total cost =Number of cases × Average cost   Results and discussion The cost of judicial system in each case under Paragraph 6 of Article 8 Law Amending the Law on Narcotics are: Total salary and benefits of the administrative and judicial staff 47,049,280 Rials. Total cost of renting office building  22,578,400 Rials. Total cost of renting office equipments and supplies 2,649,020 Rials. The cost of utilities12,600 Rials. **total cost of a case 72,289,320 Rials. The results of the research show that about 0.274 percent of judiciary budget is allocated to these cases. The results are very important because this percentage is only for a paragraph of an article from the list of crimes. In addition, it has been proven that capital punishment in drug offences is not working and has not achieved the desired goals. Furthermore, it has too many negative effects. Conclusion Economical analysis is usually based toward describing a situation that has failed to meet its defined goals and could not provided a specific outcome and then evaluate the costs; thus, it seeks a proposal to overcome the existing deficiencies. In this topic we have shown that capital punishment in drug offence is not providing its desired aims while it has too many negative effects. Thus, limiting the death penalty to organized groups and armed drug trafficking gangs can be introduced as an alternative strategy. The reason is that the punishment should not exceed what is sensible and necessary especially with regard to the losses and costs. It is worth noting that the consequential deterrence theory also confirms this. With this explanation, if the death penalty is limited to organized groups and armed drug trafficking gangs, then we will expect an estimated 90% decrease in the cases leading to the capital punishment under Paragraph 6 of Article 8 Law Amending the Law on Narcotics. This huge reduction in death penalty could provide lower judicial system costs and also reduce the social costs in this area. Perhaps, by considering other researches focused on this issue in a social way and measuring social costs of sentencing capital punishment in such cases, the benefits of the proposed strategy can be better evaluated.

Abstract افزایش کارایی در مؤسسات مالی که از مهمترین نهادهای اقتصادی هر کشوری به شمار می‌روند، یکی از اقدامات اساسی در مسیر توسعه اقتصادی کشورهاست. بررسی تطبیقی و محاسبه کارایی بانک‌های دولتی و خصوصی در ایران موضوع پژوهش حاضر است. در این تحقیق از روش تحلیل پوششی (فراگیر) داده‌ها (DEA)، که نوعی روش برنامه‌ریزی خطی می‌باشد، استفاده شده است. در این نوشتار ضمن پرداختن به ساختار نظام بانکی در ایران، کارایی اقتصادی دو گروه بانک‌های خصوصی و دولتی، با فرض بازدهی متغیر نسبت به مقیاس مورد بررسی و مقایسه قرار می‌گیرد. در این تحلیل، از دو نگرش واسطه‌ای با رویکرد درآمدی و نگرش واسطه‌ای با رویکرد ارزش افزوده استفاده می‌کنیم. محاسبه کارایی با استفاده از رویکرد نخست نشان می‌دهد کارایی اقتصادی بانک‌های دولتی بیشتر از بانک‌های خصوصی است که علت آن نیز پایین بودن میزان کارایی تخصیصی بانک‌های خصوصی به دلیل تازه تأسیس بودن و نیز دیدگاه‌های مدیریتی متفاوت این نوع بانک‌ها در استفاده از نهاده‌های تولید است. در نگرش دوم، ملاحظه می‌شود که کارایی اقتصادی بانک‌های خصوصی بیشتر از بانک‌های دولتی است و علت اصلی آن بالا بودن میزان کارایی فنی در این بانک‌ها است. در انتها نتیجه گیری می‌شود که به دلیل عملکرد نسبتاً رضایت بخش بانک‌های خصوصی و نیز ابلاغ بند‌های ذیل اصل 44 قانون اساسی مبنی بر خصوصی سازی برخی از بانک‌های دولتی، لازم است که به منظور کارآمدتر شدن سیستم بانکی کشور زمینه برای حضور بانک‌های خصوصی فراهم‌تر شود تا عرصه رقابت میان دو گروه بانک‌ها، ارتقای سطح کیفیت و کارایی اقتصادی آنها امکان پذیر گردد.

Abstract گسترش رقابت همراه با تحولات وسیع در عرصه تجارت و بانکداری، بسیاری از روش‌های سنتی را متحول ساخته و فضای رقابت را در بکارگیری فن‌آوری‌های نو حاکم نموده است. نظام بانکی نیز از این قاعده مستثنی نبوده و با پیدایش مفاهیم نوین در بانکداری، شیوه ارائه خدمات به مشتریان در اقصی نقاط جهان دچار تحول شده است. با توجه به شیوه‌های سنتی موجود در بانک‌های کشور و نارسایی این روش‌ها در ارائه خدمات جدید، ضرورت انجام این تحقیق با محوریت شناسایی موانع و راهکارهای توسعه بانکداری الکترونیک در کشور در چارچوب سند چشم‌انداز بیست ساله احساس گردید. این مقاله به دنبال شناسایی عمده‌ترین دلایل و موانع توسعه بانکداری الکترونیکی در کشور است و به همین منظور پس از نمونه‌گیری تصادفی طبقه‌ای متناسب، فرایند تحقیق اجرا گردید. عمده موانع شناسایی شده بنابر ادبیات موجود، موانع فرهنگی– اجتماعی، موانع مدیریتی، موانع مالی و موانع فنی– فن‌آورانه هستند که با انجام فرایند تحقیق فرضیه نخست مبنی بر وجود موانع فرهنگی – اجتماعی و فرضیه دوم مبنی بر وجود موانع مدیریتی در راه توسعه بانکداری الکترونیکی مورد تایید قرار گرفت. ضمن آن که فرضیه سوم این تحقیق مبنی بر وجود موانع مالی و همچنین فرضیه چهارم این تحقیق مبنی بر وجود موانع فنی- فن‌آورانه در راه توسعه بانکداری الکترونیکی در کشور مورد تایید قرار نگرفت.

Abstract مطالعه حاضر اثر توسعه مالی بر رشد اقتصادی کشورهای عضو سازمان کنفرانس اسلامی‌(OIC) را آزمون و بررسی کرده است. برای این منظور، با بکارگیری تکنیک قدرتمند پانل، روش حداقل مربعات دو مرحله‌ای و گشتاورهای تعمیم یافته، معادله همگرایی- رشد طی دوره زمانی 2004-1980 برآورد شده است. نتایج نشان‌دهنده اثر مثبت توسعه مالی بر رشد اقتصادی کشورهای عضو سازمان کنفرانس اسلامی ‌می‌باشد. همچنین بر اساس تمام برآوردهای انجام شده، توسعه مالی توسط بخش خصوصی در مقایسه با توسعه مالی توسط بخش بانکی اثر بزرگتری بر رشد اقتصادی دارد. به علاوه، محرک‌های رشد اقتصادی در این کشورها بسیار ضعیف بوده در حالی که‌ترمزهای رشد اقتصادی نسبتاً قوی هستند. به عنوان یک نتیجه کلی می‌توان ادعا کرد که کشورهای عضو سازمان کنفرانس اسلامی‌در نزدیکی سطح پایدار خود قرار دارند، ولی به دلیل تفاوت این سطح در میان کشورهای یاد شده، تولید ناخالص داخلی سرانه آنها تفاوت فاحشی با یکدیگر دارد. در مجموع، کشورهای دارای توسعه مالی بالاتر، تجارت باز‌تر، نرخ سرمایه‌گذاری فیزیکی و انسانی بالاتر و نرخ رشد نیروی کار و‌اندازه دولت کوچکتر، توانسته‌اند رشد سریع‌تری را طی دوره زمانی مورد بررسی تجربه کنند.

Abstract با توجه به اهمیت ملی و جایگاه راهبردی صنعت پتروشیمی در کشور، لزوم بررسی مجدد فرآیندهای پتروشیمی امری اجتناب ناپذیر است. در این مقاله با معرفی مدلی گام به گام،‌ شیوه اثر بخش مدیریت خوشه‌های صنعتی با توجه به تولیدات فعلی پتروشیمی و نیز چشم انداز آتی طرح‌های پیشنهادی و مصوب ‌تشریح می‌شود. شاخصه مهم و بارز مدل مذکور، وجود برنامه‌هایی جهت بازاریابی، تحقیقات بازار و تجاری‌سازی ایده خلق شده و استقرار در خوشه صنعتی است تا انباشتی از دانش در مراکز تحقیق و توسعه پتروشیمی کشور اتفاق بیفتد. سپس این مدل برای متانول مورد بررسی قرار گرفت. با توجه به افزایش ظرفیت جهانی و داخلی تولید متانول و پیش بینی‌های انجام شده در خصوص بازار آن، اختصاص بخشی از متانول کشور جهت تبدیل به محصولاتی با ارزش افزوده بسیار ضروری است. بدین منظور تولید مشتقات مهم متانول در شکل یک خوشه صنعتی پیشنهاد شده است که با سرمایه مورد نیاز 9/1 میلیارد دلاری جهت احداث و راه‌اندازی شامل 14 واحد صنعتی با فروش سالانه حدود 1 میلیارد دلار خواهد بود که ضمن اشتغال زایی حدود 2800 نفر، موجب رونق بیشتر صنعت پتروشیمی و تولید محصولات متنوع دیگری که دارای بازارهای آتی خواهند بود فراهم می‌شود.

Abstract The objective of this research is to explore the effect of international outsourcing on economic growth in Asia-Pacific countries. Accordingly, a panel regression model based on Soderbom and Teal (2003) is estimated using data of the considered countries over the period 1995-2006. In addition to international outsourcing, the model includes human capital, labor force and physical capital as the other exploring variables. Empirical results show that human capital has a significant and positive effect on economic growth of Asia- Pacific countries. Additionally, the cross effect of international outsourcing and human capital on growth has been statistically significant. Hence, investing in human resources, skill promotion and technology improvement are the main keys of trade expansion and economic growth in the countries under consideration.

Abstract Considering the expansion of global poverty and its resulting concerns, the objectives of the Millennium Development Goals (MDGs) may not be achieved unless a solution is found for this widespread phenomenon. Therefore finding a solution for poverty reduction and improving the welfare of the vulnerable group has become a universal objective. This paper discusses the poor performance of formal financial markets and financial institutions in order to help the poor in developing countries. The paper argues that microfinance and microcredit are suitable substitutions for helping the poor. Some international experiences suggest that microfinance can empower the vulnerable group, lifting them out of poverty and helping them select a desired path. Applying econometrics and statistical techniques to Iranian data, it has been seen that microcredit and microfinance can play a key role in economic growth and added-value in the agricultural sector. This in turn will result in an overall poverty reduction.

Abstract The aim of this study is to investigate the share of total factor productivity growth (TFPG), labor force growth and physical capital growth on the value added growth of non-oil sector by applying the Cob-Douglass production function during the third, fourth and fifth development plans before the Islamic revolution of Iran (1342-1356), and during the first, second, third and forth economic, social and cultural development plans of I.R.IRAN (1368-1386). The results show that the TFP growth rate and the value added growth rate of non-oil sector during the period of 1342-1356 (1/5% and 10/2%) and 1368-1386 (2/4% and 5/9%), due to the lack of synthetic method (creating the new capacities and increasing the productivity of presented capacities simultaneously), have the severe fluctuations, respectively. Also the sources of the growth of the non-oil sector Value Added of Iran’s economy during 1342-1356 are physical capital and labor force growth, respectively. In other words, the non-oil sector value added growth rate of Iran has conformed from the exogenous growth model in this period. But the growth sources of the non-oil sector value added during 1368-1386 are physical capital, TFP and labor force growth rate, respectively, which the reason of this object is noticeable decreasing in physical capital growth. It seems that the basic factor of low share of the TFP growth in non-oil sector value added growth rate in Iran’s economy is due to the choices of incorrect policies (state control of wages, interest rate, exchange rate, energy price and price of other factors of pproduction), that distort the relative price factors from physical comparative abundance of factors.

Abstract During the last recent decades, Restructuring in the electricity industry has been considered as an economical policy. Consequently, it was able to increase private investment, competition, efficiency, and productivity. The purpose of restructuring electricity industry is to change electricity industry organization, in order to omit monopoly and increase competition. Recognition of restructuring trend and its elements can help the process of choosing and adapting it with Iran's electricity industry. The purpose of the present study is to investigate the effects of restructuring on productivity of employed workforce in Iran’s electricity industry. In order to examine the way restructuring and other effective elements would affect industry productivity; the methodology of Auto Regressive Distributed Lag Models (ARDL) was used. Results indicate that both in the long term and short term, the restructuring variables have positive and meaningful effects on both the productivity of employed workforce in electricity industry and electricity intensive in Iran.

Abstract In present paper, first the concept of informal economy and its place in the economic literature has been described. Then the causes and factors involved in providing the informal sector was examined and the volume of informal economy was estimated. Second, the effect of inflation on informal economy was surveyed. To estimate the volume of informal sector, Residual discrepancy method was used and the volume of informal economy in urban areas in Iran economy from 1982/83 to 2008/09 was calculated. The results show the increasing trend of informal sector volume, during the imposed Iraq-Iran war. In addition, after the imposed war some fluctuation in the hidden economy has been detected. In the final part, after studying existing stationary of the used variables, the effect of inflation rate (in special groups) on the informal sector was examined by using OLS method. The results show that urban informal sector increase, if only inflation rate in the goods group grow up.

Abstract The present paper investigates the effect of production factors, including technology, physical capital and labour on the energy consumption intensity of Iran. For this purpose, time series data during the period of (1974-2007) have been analyzed within Cobb–Douglas production function framework. The results of the study indicate that the technology and the physical capital have caused the average annual growth rates equal to 1.48238% and 1.24073% for energy intensity, respectively, while labour has averagely decreased the energy intensity equal to 1.33016% over this period. Therefore, these factors explain an average annual growth equal to 1.39295% for energy intensity. Besides, statistics show that energy consumption intensity of Iran has been growing at an average rate of about 3.69% per year during the period of (1974-2007). According to these calculation, there also can conclude that major part of the growth of the energy intensity (about 2.3% per year) has been caused by the other factors.

Abstract Study of the changes in the stock price in Tehran stock exchange is of great importance. This is because of its application in forecasting the stock price in the stock exchange. The aim of this article is to investigate the forces and mechanisms that cause the dramatic changes in stock price and the formation of chaotic trend. To test whether the chaotic trend in the Tehran stock exchange exists, the daily stock price of Bakhtar Cable Company (as a sample) for the period of 05/25/2008-08/20/2008 has been tested using the Brock, Dechert and Scheinkman (BDS) test. The results showed that there exists chaotic behavior in the stock price time series, and the stock price moves in trend. The findings of the research confirmed that chaotic method can be applied to detect and forecast the stock price trend in Tehran stock exchange.

Abstract Due to the high costs of collecting the quarterize or seasonal statistical information and the need of econometricians for Modeleny and short analysis, the National Statistical Institutes decided to obtain quarterize time series as indirect methods of the short-term dynamics of the annual data. In this article, two alternative approaches based on related indicators and pure mathematics has been introduced and then after temporal disaggregation of government oil revenues, consumer price index and liquidity, the approaches compared to each other. The empirical results indicated that Boot, Feibes and Lisman methods deliverd the better results for two series (government oil revenues and consumer price index), whereas Chow and Lin approach is more approprate for liquidity, based on MSE and r2 criteria. Also this paper shows that the best choice approach for temporal disaggregation of economic time series is not always possible.

Abstract In recent decades adopting unreasonable monetary and fiscal policies and uncertainty in model-making and analysis of data, has become unsatisfactory in macro goals. In a new Keynesian dynamic stochastic general equilibrium (DSGE) model to study Iran economy, uncertainty is modeled as uncertainty about the true structural parameters that characterize the economy. In particular, the policymaker does not know the true numerical values nor the statistical distribution of the fiscal and monetary policy. The model considers the dependence of Iran economy to oil export. Oil sector and oil export revenues have been modeled as a separate sector and one of the government budget resources, respectively. Like in other New Keynesian DSGE model, firms face nominal rigidities and the intermediate-good sector is monopolistically competitive. Impulse response function of shocks show that non-oil output increases in response to productivity, oil revenues, money growth rate and government expenditure shocks. The finding shown that a policymaker that follows a control approach under uncertainty sets interest rates less aggressively to react against fluctuations in inflation or the output gap than in the case of absence of uncertainty. Model uncertainty has the potential to change importantly how monetary and fiscal policy should be conducted, making it an issue that can not be ignore. In main result, policy performance can be improved if the discretionary policymaker implements an optimum policy in the model. In effect, a fear of modeluncertainty can act similarly to a commitment mechanism. When there is uncertainty about the persistence of inflation, it is optimal for policy makers to respond more aggressively to shocks than if the parameter were known with certainty, since the avoid bad outcomes in the future.

Abstract In this study, the relationship between the some of corporate governance mechanisms and corporate financial performance after Initial Public Offerings (IPOs) in Tehran Stock Exchange (TSE), based on data from 70 companies during the years 1381–1387 (2003–2009) are examined. Corporate governance mechanisms includes Ownership structure (i.e., Institutional ownership, Managerial ownership), and Board composition (i.e., the percentage of Non executive director or Board independence, and CEO duality) in order to evaluation of the, return on asset and Tobin’s Q is used. Statistical method used to test hypotheses is panel data approach. Findings show that institutional ownership and managerial ownership are positively related with firm performance after going public. Moreover, the percentage of non executive director improves firm performance. However, there is no relationship between CEO duality and firm performance.