Iranian Economic Review
Volume:17 Issue: 34, Spring 2013

This study investigates the Iranian tea market structure based on the price transmission mechanism between farm, wholesale and retail prices using annual data for the period 1977–2010. For the study of the asymmetry, the Johansen cointegration analysis was used while at the same time an Error Correction Model (ECM Model) was estimated. With the assistance of the cointegration technique, we surveyed the existence of a long-run relationship between farm and wholesale prices, farm and retail prices. The causality test showed that the farm price determines wholesale and retail prices and the wholesale price causes the retail price, whereas the reverse was determined not to be valid. In addition, application for an error correction model confirmed the existence of asymmetry in the price transmission mechanism within the farm-retail and wholesale-retail. This study used concentration ratios and a Herfindahl-Hirschman indicator to show that the market structure of the Iranian tea industry is almost exclusive. The presence of market power and the exclusive market structure of the Iranian tea industry are the main reasons for price asymmetry.

In this paper we have analyzed the economic feasibilities of producing liquefied natural gas (LNG) using “South-Pars” gas field of Iran based on the most recently built facilities around the world. Iran has the world’s second largest reserves of natural gas and can satisfy a significant portion of the anticipated demand of LNG in the next years. The results show that this project is commercially viable based upon the fiscal assumptions evaluated. In order to investigate the most important factors affecting the project, we have used the sensitivity analysis. Based on the results, the price of LNG, fixed investment cost and feed gas price have substantial effects on the project and its IRR.

The main Purpose of this paper is to investigate the impact of monetary regime and exchange rate volatility on the exchange rate pass-through in two subsets of countries with the inflation targeting versus exchange rate as nominal anchor over the period of 1999-2010. To conduct this study, the empirical model has been estimated by dynamic panel data approach and GMM estimator. The main findings of this paper show that exchange rate volatility has positive effect on the import prices in the two groups of countries. In addition, the results of model estimation reveal that the interaction effect of monetary regime with nominal effective exchange rate has positive and negative effects on the import price index in the first and second group of countries respectively. The overall conclusion suggests that the impact of monetary regime on the exchange rate pass-through under exchange rate volatility is higher if it is accompanied with exchange rate anchor in comparing with inflation targeting strategy.

Public sector decision-makers are faced with the task of allocating resources among different alternative subject due budgetary constraints. In this paper Official Development Assistance (ODA) data have been considered as foreign aid. ODA is channeled through the public sector of recipient countries and, hence, the ultimate effect of ODA on savings or economic growth depends on how governments respond to it. This paper tries to explore the impact of official development assistance on public sector behavior in selected developing countries and contribute to the fiscal response literature on two main grounds. First, it specifies a fiscal response model. Second, using panel data model for a sample of 25 aid recipient countries in Asia and Latin America over the period 1991-2010. Empirical results indicate that official development assistance has a positive and significant effect on government investment expenditure, but it has not significantly impact on government current expenditures. Results also show that ODA crowds out both government revenue and public borrowing.

The impact of financial repression on financial depth is one of important issues for monetary authorities. Hence, this study examines the empirical relationship between financial repression and financial depth based on McKinnon-Shaw hypothesis in two set of countries, Including 43 lower middle income and 33 upper middle income countries during 1990 to 2008. Real interest rate and reserve ratio is used to measures financial repression and the method that is used in empirical analysis is Dynamic Panel Data (DPD) technique. The results show that reserve requirement and inflation have the negative and significant effect on financial depth in two set of countries. Also, the results indicate that nominal interest rate and economic development positively affect the level of financial depth. Thus, financial repression is an obstacle to financial depth and increase in nominal interest rate and reduce reserve ratio and inflation is suggested to encourage financial depth in two set of countries.

We investigate a differential oligopoly games with sticky prices and environmental externality. The external effect is determined by sales. We compute the socially optimal allocation, where a benevolent planner sets production plans so as to maximize the discounted social welfare, in both existence and non-existence environmental externality, and show that the latter equilibrium entails a larger level of steady state production as compared to the former.

The consequences of illegal import as part of underground economy indicate that why it is important to study smuggling. In this paper, fuzzy logic approach is applied to compute import smuggling in Iran from 1978 to 2010 through three explanatory variables including import tariffs, exchange gap and trade openness. According to the results, relative volume of import smuggling to official import during the years of war and revolution, and the years of first, second, third and fourth development plan was approximately estimated 18.2, 17.6, 29, 32.2 and 30.8 percent, respectively. While during the entire period it has been 24 percent, on average. Finally, the results indicate an increasing trend for import smuggling as it has increased from 19.3 percent in 1978 to 27.6 percent of official import in 2010.

Since 1980s, credit policy has been promoted as an important mechanism in job creation, especially for women. However, some researchers have showed that although credit programs have significant potential for contributing to women’s wellbeing, yet, many women borrowers have limited control over loans and/or resulted income. In such cases credit policy may not change women status. Women’s cooperatives are one of the institutional set up for mitigating female unemployment and promoting women’s position in the society and household. However, in most cases, cooperatives that established by the help of state subsidies may not realize the expected goals. Our field research about women’s cooperatives in Mazandaran province (Iran) confirms that there is no automatic benefit of access to finance for women; as many registered women’s cooperatives have not been able to create long lasting economic activity, despite of receiving loans.