آزاده طالب بیدختی

Understanding the relationship between financial development and tourism activities is crucial to attracting investment and promoting sustainable growth. Tourism expenditures and international tourist arrivals as components of tourism demand affect economic growth directly or through their influence on financial development.

Design/methodology/approach: 

Using the Autoregressive Distributed Lag Model (ARDL) for the data on Iran's economy from 1995 to 2018, we examined the relationship between tourism demand and the level of financial development. Then, we investigated the impact of financial development on the relationship between tourism demand and GDP per capita growth.

The results indicated a positive and significant relationship between tourism demand and financial development: For one percent growth of tourism expenditures, the financial development increases by 0.3425 percent. A one percent rise in the arrival of international tourists leads to a 0.609 percent increase in financial development. The interactive effect of financial development and tourism expenditures on the growth of per capita production is 0.408, which is statistically significant. Therefore, we can argue that enhancements in financial development strengthen the effect of tourism expenditure on GDP per capita growth.

The results are consistent with the tourism-led growth hypothesis and suggest authorities can improve economic growth by strengthening the tourism sector and financial development.

Originality/value:

 Paying attention to the impact of tourism demand indicators on financial development, besides their interactive effect on the growth of per capita production, covers the existing study gap and is considered the advantage of the present study.

Knowledge-based companies often need the participation of venture capitalists or government facilities for prototyping and industrial production of their products. Since, in such cases, hidden behavioral issues such as adverse selection and moral hazard will emerge, in this study, we are looking for the design of mechanisms to explain the optimal conditions for providing government facilities to these knowledge-based companies by considering these behavioral issues. The mechanism to achieve the desired goal is to provide two facility provision contracts: a contract with the entrepreneur's maximum financial commitment and minimum facility rate and the other with the entrepreneur's minimum financial commitment and maximum facility rate. Given that government facilities have a social cost, it is appropriate for the government to enter projects with positive externality but not supported by venture capitalists. This minimizes the redundancy of projects.
Inspired by the study of Lach et al. (2020) and calibrating the parameters based on the reports of the Presidential Vice President for Science and Technology, banking information, and research and technology funds in 2020, the simulation of the model for Iran's economy showed that the implementation of the second contract leads to higher social welfare. The government's financial support to reduce the redundancy of facilities, along with the private sector's support, improves social welfare.

In this study, we introduced various mechanisms that the central bank can use to predict the demand for liquidity in the interbank market. Simulating standing facilities and revenue in each mechanism from the 14th of October 2020 to the 25td of October 2022 in Iran showed that the higher the trading cost, the lower the volume of transactions in the interbank market, and most banks turn to standing facilities to meet their liquidity needs. The degree of interdependence of reserve requirements between banks, the uncertainty of banks regarding their private reserve requirements, and trading costs in the interbank market play a key role in choosing the best and most efficient mechanism. 

Iran plays an important role in West Asia due to its abundant natural resources, especially oil. Also, considering the economic importance of France as one of the powers of the European Union, trade relations with this European country in various dimensions, such as employment, security, and expertise in production. This study aims to investigate the trade relationship between Iran and France in the two cases of the existence of sanctions and without sanctions in the period 1979 to 2020. For this purpose, with an emphasis on the law of gravity, we investigated the factors affecting the bilateral trade between Iran and France. The results of the Johannsen’s Cointegration Test confirmed the existence of a long term equilibrium relationship between the variables of the model in the presence or absence of sanctions in Iran's economy. The results of estimation the model using the Ordinary Least Squares method (OLS) showed that the GDP of both Iran and France has a positive and statistically significant relationship with bilateral exports between the two countries. Also, the population of France has a direct effect, and the population of Iran has a reverse effect on bilateral exports; Althought population growth is important in international trade, it seems that these effects have not been very significant. Also, the estimation results of the model in the presence of sanctions showed an inverse effect of sanctions on the growth of two countries' exports to each other, confirmed in the long term. The presence of sanctions reduces the exports of Iran and France to each other by 0.0133%.

The experience of large fluctuations in the Foreign Exchange Market in Iran and the impact of monetary and fiscal policies on this market revealed the importance of adopting a scientific approach by fiscal and monetary policymakers and paying attention to the behavior of other actors (Foreign Exchange Speculators) in the decision-making. The present study tries to evaluate the Social Loss of adopting different approaches by monetary and fiscal policymakers for 9 Years (2011-2019) using the Game Theory approach via identifying the optimal interactive approach between the Government and the Central Bank that leads to the least amount of Social Loss. According to the results, the least Social Loss is achieved when the Monetary Actor pays more attention to the stabilization of Interest Rates and has more Independence in decision-making. In other words, the increase in Interest Rates by the monetary authority increases the desire for Foreign Exchange demand by Foreign Exchange speculators, as well as the desire to further divert government spending from the balanced government budget, which both behaviors interpreted to increase Social Losses. Accordingly, by resorting to the criterion of Social Loss, we can recommend the instrumental independence of the Central Bank to increase Social Welfare. This result requires a change in the conduct of Monetary and Fiscal Policies and a change in the attitude of the country's economic officials about the independence or non-independence of the Central Bank and how it interacts with the Government.

One of the requirements of leading the knowledge-based economy by relying on science production and commercialization is the provision of financial resources for knowledge-based companies. Considering the need for minimal and targeted government intervention and hidden behavioral issues such as adverse selection and moral hazard, this study analyzed the optimality of three funding mechanisms, including financing through the private sector, providing facilities, and support through the payment of subsidies to venture capitalists. Using the information available in 2020 and inspired by the study of Lach et al. (2020), the present research simulated the model for Iran. The results showed that the highest level of social welfare is related to the support of entrepreneurial projects through a contract with the minimum participation of the knowledge-based company in the commercialization of the product from internal sources and receiving the facilities with the maximum loan rate. The support mechanism through the subsidy payment to venture capitalists is second in terms of welfare. The government promotes the growth of knowledge-based companies by providing financial resources and incentives to venture capitalists. Government support through providing a contract with maximum participation in financing and receiving facilities with a minimum loan rate and the private venture capitalist’s aid are ranked third and fourth in welfare, respectively. By choosing the optimal policy, the government can improve the welfare state and provide intelligent support for knowledge-based companies.

In this study, we used a Dynamic Stochastic General Equilibrium Model and then we evaluated and compared the welfare performance of the four macroeconomic policy-making regimes- standard policy regime, generalized policy regime, the macro-prudential policy-making regime, and combined monetary and macro-prudential Policy regime. For this purpose, we used the data of Iran's economy during the period 1990: 1 to 2014: 4. The results of examining the optimal policy coefficients calculated using optimal simple rule (OSR), showed that the optimal policy is the policy in which policymaker have more importance to controlling and stabilizing the inflation so that achieving output stability can be in the next priority for the policymaker. Also, the macro-prudential policy-making regime would lead to a significant reduction in inflation and output volatilities and this policy-making regime would improve welfare status in Iran economy. In addition, the welfare performance of the combined monetary and macro-prudential Policy regime, generalized policy regime, and standard policy regime are ranked in second, third and fourth place, respectively. In the following, we have compared the welfare performance of macro-prudential policy regime and the combined monetary and macro-prudential Policy regime in a situation where the financial shock was the only shock to the economy. The results showed that under these conditions, it is optimal for policymakers to use the macro-prudential tool aggressively.

Today, achieving financial stability alongside stabilizing inflation and output is of particular importance among monetary policymakers and regulatory authorities. In this study, a Dynamic Stochastic General Equilibrium Model was used for the period 1990: 1 to 2014: 4 in the economy of Iran, in which a measure of financial shock was also introduced. In this model, the financial shock is modeled as a reduction in external financing premium of the firm. Comparison of the performance of policy rules showed that following an expansionary financial shock, macro-prudential policy regime, in which instruments of monetary policy and macro-prudential policy deal with excessive growth of credit, leads to a significant reduction in the external financing premium of the firm. This in turn leads to less volatility in economic variables, such as inflation and output. This would improve the welfare in the Economy of Iran.

In this study, to measure financial instability and assess the probability of a financial crisis, we make a composite index which is a weighted average of Non-Performing Loans ratio, and volatilities in the stock price index by using Iranian quarterly time series for the periods of 79q1 until 93q4. Then, in order to investigate the affecting factors on Iran’s Financial Instability, a basic model is estimated which, the financial instability index is influenced by the gap of credit growth rate, output gap, the index of central bank credibility, inflation, and the growth rate of public sector debt in the banking system. The results indicate that an increase in the gap of credit growth reduces the Financial Instability. Furthermore, the output gap has a negative and significant effect on the index of Financial Instability. In addition, a higher credibility of the central bank in the commitment to the targeted inflation leads to increase in Financial Stability. As expected, an increase in inflation and public sector debt in the banking system raises the instability of the economy. moreover, to evaluate the robustness of the results, we add the square of the gap of growth rate credit to the model as an explanatory variable. The results indicate that growth rate credit has a non-linearity relationship with Financial Stability, which induces the existence of an optimal level of credit growth rate. So the excessive credits can increase vulnerability and economic instability.

Policy rate and macroprudential tool are two of the main policy tools that affect the financial situation of the economy. While the policy rate is well-known monetary policy tool among most central bankers to achieve price stability and output stability in the economy, macroprudential measures have resurged recently and are becoming an increasingly active instrument. The main advantage of having two sets of policy tools is that they can target different policy objectives. In empirical studies, the effectiveness of a macroprudential measure is measured through its effect on procyclicality of financial risks (the correlation between GDP growth and financial risk variables such as credit growth and financial leverage), or through the level of financial risk (for example, the level of Credit growth and financial leverage). In this study, following Bailliu and et.al (2015), we define macroprudential policy as a policy that uses primarily prudential tools to limit systemic financial risk. For this purpose, credit growth is used as a substitute for financial instability. Also, we focus on the leverage index as a precautionary tool to deal with excessive credit growth. Although there seems to be a broad consensus on the central role of macroprudential policy measures in containing financial instability build-ups (IMF, 2014a), there are different views on the role of monetary policy in this matter. Smets, (2014) distinguishes between the three main views. The first view is that monetary policy should only focus on traditional objectives, such as inflation and real economic activity. In the second view, financial stability is at least as important as traditional objectives, and that decisions regarding the setting of policy interest rates should equally consider financial stability concerns. The third view, which is increasingly gaining consensus in the aftermath of the Global Financial Crisis, acknowledges that in some circumstances, monetary policy may deviate from its traditional objective in order to support financial stability, if costs from doing so are smaller than benefits (IMF, 2015b). Hence, in this study, in addition to examining the role of monetary policy in achieving the common goals of the policy of stability of inflation and the stability of output in the economy, we examined its role as well as the role of financial leverage in improving the financial stability of Iran through controlling the growth rate of bank credits. For this purpose, first, using the Markov switching model, we estimated the policy rule in which the rate of base money growth is adjusted in response to the inflation gap and the output gap. The results showed that the central bank has been more seeking to achieve the goal of economic stability through the application of expansionary monetary policy; so that achieving this goal has a higher stability and durability than the goal of inflation stability during the studied period in the Iranian economy. Then, the policy rule is estimated in which the growth rate of credit to private sector (as a measure of financial stability) is adjusted in response to monetary policy shocks and financial leverage (the ratio of private sector debt to output). The results showed that the financial leverage index has not been used as a precautionary measure for tackling systematic risk and achieving financial stability during the years under study; In spite of worsening the status of entrepreneur's balance sheets by increasing private sector debt, credits growth to various sectors of the economy have also increased. Nevertheless, the results are indicated the proper performance of monetary policy in improving financial stability by controlling the growth rate of credits. So that, the monetary policymaker, through controlling excessive credit expansion, reduces the risk and probability of a default on loans by entrepreneurs and thus has led to improved financial stability of the economy.

The aim of international economic sanctions is imposing economic restrictions on target countries. In order to decrease the sanctions negative brunt on citizenry and make it ineffective, government may respond to sanctions through policies such as increasing the supply of public goods. This paper studies the regime changes of government expenditures in Iranian economy in response to economic sanctions using Markov-Switching model during period of 1978 to 2014. The results from estimated specified model indicate that firstly total, constructive and current expenditures in response to sanctions follow Markov-Switching pattern. Secondly, total, constructive and current expenditures in response to sanctions raise, and this finding confirm using public goods as defensive tool to contrast sanctions in Iran.

In this paper, by using a model of the new Keynesians, we investigated the role of the central bank's accountability to shocks that causes deviations in the performance of the monetary policymakers. For this purpose, we used quarterly data for 69: 1 to 93: 3, and estimated the basic equations of the new Keynesians model. Then, By calculating the optimal values for the central bank's accountability to the two potential sources of deviations from the goals of economic stability and deviation of commitment to rules, we compared the loss of central bank to the loss of social. The results showed that the degree of central bank's accountability to commitment an instrumental rule is less than the degree of the accountability to achieve the goals of economic stability. Also, the central bank with applying Reforms in the implementation of its policy by optimal response to both types of deviations can be close to the results of the welfare society.
Then, in order to compare the importance of accountability of the central bank to achieve both goals, we considered two cases. The results showed that in the period of study in Iranian economy, the main objective of monetary policymaking has been more focused on stability of the economic goals but, the importance of commitment to follow an announced rule and accountability to that rule is too low, so that, it had no impact on the welfare function of the central bank.

In this study, the behavior of monetary and fiscal policy in the Iranian economy has been investigated during the period of 1360 to 1392 using Markov switching model. For this purpose, the monetary and fiscal policy rules has been used in which the growth rate of liquidity and the tax revenues are as instruments of the monetary and fiscal policies. The results from the likelihood ratio test show that both the fiscal and monetary policy rules in the Iranian economy follow a regime switching model. Based on the results from the estimation of fiscal and monetary policies rules using a Markov switching model, the period of study divided into three periods in the years of 1360 to 1364, both monetary and fiscal policymakers have faced with passive monetary and fiscal policies, so that, they did not have an adaptive behavioral interaction with each other. During the years of 1365 to 1387, the Iranian economy has faced with the passive monetary policy but an active fiscal policy, So that, in this period, the monetary policymaker has no powerful reaction in adjustment of its policy instruments to increasinginflation at the same time, increasing the outstanding debt of government decreases the tax revenues and increases the budget deficit. Finally, in the period of 1388 to 1392, the policymakers follow the passive monetary and fiscal policies

Today، the discussion of regularity monetary policy in achieving inflation and output gap stabilization is important. In this paper، we investigated the persistence of the output gap in Iran economy and then by using a hybrid New Keynesian model based on quarterly data for 1990:1- 2011:3. We compared three alternative instrumental rules in monetary policy for Iran economy. The results indicated that in Iran economy: firstly، output gap is forward- looking and has little degree of persistence. Secondly، inflation targeting rule in comparison with the price level and speed limit targeting rule has the lowest social loss. In addition، the result of estimating coefficients under alternative rules showed that in comparison with other instrumental rules، inflation targeting and the first equation of price-level targeting، have well predicting power، especially in long-term forecasting horizons.

The commitment and forward-looking behavior of central bank is of great importance. Commitment imposes less social costs on the central bank and the public. However، while there is wide agreement on the importance of commitment، there is much less consensus on how to implement commitment through targeting or instrumental rules. In this paper، we have estimated a basic New Keynesian model in Iran economy based on quarterly data over a sample period for 1990-2010. Then، we introduced a kind of instrumental rules that is called Speed Limit rule. The main feature of this rule is that the output gap is replaced by the changes in the output gap in the central bank''s loss function. Then، by calculating appropriate weights under alternative targeting rules، we showed that this rule has the lowest social costs. Then، assuming the use of interest rate as primary monetary policy by the central bank، it is optimal to consider the role of the changes in the output gap (i. e. speed limit rule) in addition to the role of inflation and the output gap. As we expected، the estimation results of this instrumental rule in Iran economy showed that this rule has not been used for determining the interest rate. In other words، among the variables considered، only inflation rate has a positive and significant relationship with the interest rate، and the output gap and the changes in the output gap are not used in determining the interest rate.