Iranian Economic Review
Volume:2 Issue: 2, 1996

A number of authors have investigated whether aggregate and! or local labor market conditions affect college enrollment, hut the results across studies are very inconsistent. There are two shortcomings in the previous studies that may explain the weak correlation between labor market opportunities and college enrollment. First, we will use the unique structure of the HS & B to construct unemployment and wage rates for new high school graduates at the SMSA level. Second, we will estimate both two and four- year college enrollment equations, allowing for a differential impact of labor market opportunities on these two types of schools. While four- year college enrollments tend to be higher during recessions, two- year college attendance decreases. Two- year college enrollments are more sensitive to labor market conditions than enrollments in four- year colleges. The results in our study do not support the findings reported in previous studies in which the authors have used aggregate level data for unemployment rate and average wage. The effect of local labor markets on college enrollment.

Devaluation has different effects on the structure of trade patterns in countries which have a fixed exchange rate regime. The experience of devaluation in many countries has clearly shown that devaluation policies have not always led to the improvement of their trade pattern structures. Some empirical studies have revealed that after employing devaluation, the real rate of money in some nations temporarily declined and then was neutralized over time. In some instances, the practice has led to an appreciation of the real rate of money. An empirical investigation of the Iranian trade model shows that, devaluation will lead to an improvement of Iranian trade patterns.
Its results reveal that devaluation lends to increase exports and decrease the demand for imports. It has also shown that within Iranian economic structure, an exportation of non-oil commodities depends more upon a money base than an exchange rate. This reveals that the elasticity of export function is low relative to the changes in the real exchange rate.
Therefore, one can conclude that a devaluation policy will not effect the exportation of non-oil commodities in any
drastic manner. Furthermore, the results of the adjusted Marshall-Lerner condition reflect that devaluation will lead to an improvement in the Iranian trade deficits.

The examination of the theory and history of financial crisis in Europe and the United States is the subject matter of two important works by Kindle Berger (Kindle Herger, 1978, and Kindle Berger & Lafarge, 1982). In his first work, Kindle Berger (1978), has provided us with a remarkable account of European and American financial history from 1720 to 1975. The second hook (Kindle Berger & Lafarge 1982) presents a collection of essays that include a more in- depth history of selected financial crises in England, Germany, Italy and the United States. In both of these books the authors argue that the observed financial swings have followed a similar pattern. This pattern is best explained by “financial instability hypothesis” that was first presented by Fisher (1932) in his debt-deflation framework of analysis, and later was elaborated by Professor Hyman Minsky (Minsky, 1972, 1982, Kindle Herger 1978).
This paper is an attempt to show that the Iranian financial crisis of 1977 followed the same pattern that characterized these earlier European and American financial fluctuations. To this end, I shall develop a Fisher-Minsky-Kindle Berger theory of financial instability, I shall then give an account of the oil boom and bust of 1973-1978 in Iran that culminated in the financial collapse of 1978. s

The primary goal of any economic policy in the production front is, as far as possible to enhance the degree of sectoral interrelatedness (henceforh SI) within the home economy. The focal objective of such policy is not only to increase the sectoral value added of the economy but also to improve the position of the trade balance in the commodity trade front. Iran, being characterized a sole mono- economy with predominance of oil share in the domestic and foreign trade commodity account, has for the past three decades opted to diversity her economy both at home and the foreign trade front (Banouer, and Aruafar, 1990). The past policy package implies that of integration of oil and oil related products to the rest of the domestic economy, i.e. agriculture, industry and sevice sectors and vice- versa in terms of forward and backward linkages on the one hand and the commodity diversification in the foreign trade on the other hand(1). Such laid down development strategy was not only the prime concern of Iran as the other oil producing countries have almost followed the similar exercise right from the late 1973 oil boom (Banouei, 1992).