Iranian Journal of Economic Studies
Volume:1 Issue: 1, Spring 2012

This paper sketches a model of product differentiation according to the hedonic hypothesis that is based on the theory of consumer behavior of Lancaster (1971). Lancaster suggested that utility is derived from the characteristics of the good and not the good itself. Thus, from the perception of the consumer, every characteristic has a price. This is the hedonic (or implicit) price. We have estimated implicit price and quality changes of Iranian car market for the years 2005 to 2010. The empirical results indicate that during this period the safety variables (types of airbags and brakes) have been the most important variables affecting the price of automobile, and also the changes in the quality of new automobiles sold in Iran have been responsible for price increases of about 47% during this period.

In this paper, income per capita convergence hypothesis is tested in selected OIC countries. For this purpose, we use the time series model and univariate KPSS stationary test with multiple structural breaks (Carrion-i-Silvestre et al. (2005)) over the period 1950-2008. The results show that most OIC countries could not catch up toward USA. Although because of some positive term of trade shocks, they experienced catching up process in some sub- periods, they did not have appropriate infrastructure as, they could not use these opportunities and escape lag deadlock.

The purpose of this paper is to test the hypothesis first proposed by Romer (1993); suggesting that inflation is lower in more open economies. According to this hypothesis, central banks have a lower incentive to engineer surprise inflations in more-open economies because the Phillips curve is steeper. Furthermore, Comparing with other empirical studies, this paper has used the new KOF globalization index to estimate the relationship between economic globalization and inflation. We utilized the ARDL Bounds test approach to level relationship proposed by Pesaran et al. (2001) for Iranian annual data during 1970-2009. The results from Bounds test approach confirm the existence of the long-run relationship among the variables for both spesification. The results show that openness has a negative and significant effect on inflation in short-run but its effect on inflation in long-run is positive. Globalization has a negative and significant effect on inflation in short-run and long-run. Thus, it seems that the new economic globalization (KOF index) which is a broader comprehensive index is a better proxy of openness.

In this paper, Markov chain and dynamic programming were used to represent a suitable pattern for tax relief and tax evasion decrease based on tax earnings in Iran from 2005 to 2009. Results, by applying this model, showed that tax evasion were 6714 billion Rials**. With 4% relief to tax payers and by calculating present value of the received tax, it was reduced to 3108 billion Rials. With regard to transition periods of tax-receipt and its discount index, the present value of future tax cash flows, during the future period, were 16034 billion Rials. Also, by means of dynamic programming, the break–even-point of tax relief index was determined. Consequently, if the discount rate were less than 22%, the optimal policy to increase tax revenue would be not to give discount and if it were more than 22%, the favorable policy would be to offer discount to tax payers.

Financial crises and currency instabilities within developing and emerging economies during the last decade had a tremendous impact on the economic performance and increased vulnerability of economies against domestic and foreign shocks. The timing of capital liberalization is one of the significant debates among other issues related to currency instability, and it would be more convenient to take this policy whenever the economy is ready for it. In this study trade openness is assumed to be a perquisite for capital liberalization. The aim is to see whether the capital liberalization without enough trade openness would be a possible factor for the currency instability. To reach to this aim, a sample of emerging countries for the period of 1998-2009 is selected. A Probit Panel Data model is used to estimate the parameters of the model. The parameters are all found to be significant and support the main idea of this study.

On 6 December 2006, Australia and Korea announced a joint study on a possible Australia-Korea free trade agreement (AKFTA) to promote trade and economic relations between the two countries. The paper provides empirical evidence on the possible gains and their transmission mechanism from this agreement. Significantly, it uses a new economic policy modelling approach, the endogenous gravity theory (Tran Van Hoa, 2004) to provide credible and substantive causal findings and subsequent forecasts, as distinct from geopolitical economy arguments and scenarios, to evaluate the possible gains of the AKFTA to inform discussion and policy advice.

In order to study energy consumption in Iran's agricultural sector, a Genetic algorithm concept was used to calculate significant factors affecting energy consumption between 1974 and 2008. Then, durability or "stability" of variables was assessed through econometric method (Augmented Dickey-Fuller test). In addition, long-term and short-term relationships of energy consumption were estimated using Vector Error Correction Model (VECM). Results of this study reveal that intensity of energy consumption variables in agricultural sector and Gross Domestic Product (GDP) are of great importance and have a considerable impact on energy consumption in agricultural sector of Iran. Therefore, these factors can be beneficial for policies of energy consumption conservation in agriculture sector.