Iranian Economic Review
Volume:10 Issue: 14, Autumn 2005

Through the history and since 1933, the Iranian rial has declined from 11.2 rials per dollar to almost 8600 rials per dollar today in the parallel or black market. At the same time the official rate has been kept at artificial level most of the time, not consistent with other macro conditions of the country. Historically, however, the Central bank has adjusted the official rate and brought it in-line with the black market rate. This paper not only reviews the historical developments surrounding Iranian rial, but also provides an event study supporting the literature that any foreign exchange control has only short-run impact on the official exchange rate. In the long-run, the official rate must be adjusted toward the black market rate, as evidenced by the behavior of the Central Bank of Iran

The Housing sector can be considered both the exchange of intermediate goods and the investment goods for the manufacturing sectors. The housing sector is the buyer of intermediate goods such as brick, cement, iron etc from one side, and uses the investment goods such as crane etc from other side. Furthermore, it uses the labour force. Thus, the housing sector has three types of buying which includes intermediate goods, investment goods and labour force. In addition to the above case, the housing sector is also a supplying sector. From this stand, it produces the intermediate inputs, to the manufacturing sectors. On the other side it produces investment goods, which is bought by other economic sectors. The latter can be named as the investment in housing, which is a considerable ‎‎‎‎‎‎‎amount and can be said that it is equal to the total investment of private sector in the housing. The above discussion can be stated in an input-output framework. To simplify and summarize, the whole economy is divided into two sectors of housing and other sectors. It is obvious that other sectors include, manufacturing sector as well.

Extensive government control over industrial and service sectors show it could not overcome the increasing misuse of public resources, raising debts, lack of improvement in operation efficiency and mismanagement. Numerous productivity programs could be a key to improve performances.In present article a case of productivity program in one of State Owned Enterprises (SOEs) namely Isfahan Steel Mill Company (ISMC) was identified, then conditions and factors that enhanced its performance through a productivity plan was studied. Then productivity plan consisting of external and internal environment, productivity program, and its performance was looked into. In order to gather information the author relied on secondary data sources and interviews with key Human Resource Management personnel in ISMC.The result showed Human Resource Balancing Plan in productivity program at ISMC was affected positively by government as an external factor and also the program was affected positively by newly wage and salary systems. During a period of 7 years 18,207 employees optionally left the ISMC decreasing employees from 31,684 to 13,477 and production rose from 600,000 tons annually to 1.9 million tons per year.At the end with an analysis based on Yu's internal and Daft external factors a number of strategies are recommended for enhancing Public Sector Undertakings (PSUs) productivity.

The aim of this paper is two folds:1- To compare the level of technological advances in Iran's Automotive Industry with that of its competitors globally.2- To compare the relative technological advances of Iran's Auto Industry with other sectors of the Iranian economy.To measure the level of technological advances, we have used the Atlas Model of Technology.The results indicate that the level of technological advances in Iran's Auto Industry is quite low compared to developed countries; differences in the level of technology used in other sectors of the Iranian economy are not statistically significant.In conclusion, we proffer several recommendations and suggestions for improving the current level of technology in Iran's Auto Industry.

The first experimental SAM for Iran was constructed more than three decades ago under the supervision of Prof. Pyatt. Based on this work Prof. Pyatt had observed that the way in which Iran was spending oil revenues was likely to exacerbate urban–rural income differentials in Iran. In his approach to SAM he did not distinguish between factorial and institutional income distributions preferring to amalgamate both. Prof. Pyatt’s viewpoint and his approach which was largely ignored at that time many still hold true for the Iranian economy today. However, we believe that considering factorial and institutional income distributions separately, would portray a more complete picture of the complexities of structure of production with urban–rural inequalities. In this paper, we attempt to analyze the structure of Production and urban–rural income distributions in terms of factorial income distribution (private and public labour incomes) and institutional income distribution (urban and rural households) in the structural path analysis framework.For this purpose, we have used the 1996 SAM Constructed by the Economic Research Center, Faculty of Economics, Allameh Tabatabai University, in collaboration with Statistical Centre of Iran and Central Bank of Iran.

The purpose of this paper is to estimate the welfare cost of inflation in Iran. We first use the long-horizon regression approach developed by Fisher and Seater (1993) to obtain an estimate of the inflation rate elasticity of money demand and then the Baily’s consumer surplus approach to calculate the welfare cost function. The results show that reducing inflation rate from 40% to 0% increases the welfare of money holders by 0.3% of GDP. The welfare cost function helps the central bank to estimate the welfare effects of monetary policy.

Generating effective employment opportunities is one of the principal challenges faced by development planners in Iran. If investment projects are undertaken on the basis of sectoral priorities in production and employment, the economic and social problems emanating from unemployment will be reduced, helping the Country's process of development. In this paper, an attempt is made to identify key sectors in terms of generating output and employment in the economy of Iran as a results of increased investment. The novelty of our approach is to demonstrate how inter-industry relations (input-output table), investment coefficients, and incremental labor-output and capital-output ratios can be integrated to accomplish the above objective. The empirical application of this approach has revealed the pronounced effect of investment on economic and employment growth potential of the service sector and some of manufacturing subdivisions like clothing and leather, other basic metal industries, food and textile manufacturing and wood paper and printing industries.

This paper provides a critical review of the demand for money estimation. In doing so, first we explain the main effective factors on the demand for money on the light of monetarists, which those are: transaction demand for money and opportunity cost of holding money. Then I have done a short report about the existing studies on the demand for money in the Iranian economy and have a special attention to their defects and problems. Some of them are as follow:Including the wrong factors on the demand for money model which in turn it leads to double calculating the budget deficit, making mistake to compute the data regarding to data conversion, including a stationary variable on the co-integration regression, and as a result obtaining wrong magnitudes for some coefficients in the model and finally the lack of offering interpretation for money income elasticity.

The main goal of this paper is to estimate the level and distribution of human capital (HC) in Tehran province, Iran. In doing this we have first reviewed theoretical and empirical literature of human capital. And then we used Dogum Method for estimation of level and distribution of household's human capital in Tehran. The Dogum Method is based on three old methods of estimation. We used latent variable, because human capital is a qualitative variable. The results show that there is a positive relation between variables which are related to human capital and formation of human capital in Tehran province. Also, the results indicate that household income and human development are respectively the most and the least effective on household's human capital in Tehran.

This paper explores people’s behavior when they are facing financial risks. Through the setting of an economics experiment, people’s willingness to bear financial risks and their tendency to impose risks on others are investigated. The experiment result shows that most people are risk-neutral or risk-averse when making decision under financial environment, and their tendency to impose risks on others is directly related to their own willingness to bear risks.