khosrow piraee

The commodity terms of trade shocks are important to explain the macroeconomic fluctuations of oil-exporting countries. Oil price shocks are the main source of terms of trade variability in oil-exporting countries. Given the significant effects of terms of trade fluctuations on domestic macroeconomic variables, understanding the transmission and propagation of terms of trade fluctuations is crucial in the design and conduct of macroeconomic policies in oil-exporting countries. An appropriate monetary policy can help to stabilize these shocks.This study evaluates three alternative monetary policy regimes’ responses to commodity terms of trade shock and export sector productivity shock using a New Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. In this study, the model has been developed based on Hove et al. (2015), Monacelli (2005) and Cashin et al. (2004) for the economy of Iran. This theoretical framework characterizes a small open oil-exporting economy by two domestic sectors: traded sector and the non-traded sector. In the non-traded sector, prices are sticky according to Calvo`s (1983). There is one external sector which is the rest of the world. Also, incomplete exchange rate pass-through is introduced via nominal rigidities on import prices. This model has been developed to evaluate the response of different monetary policy regimes to commodity terms of trade shocks and export productivity shocks. Based on empirical evidence such as Shajari et al (2015), pass-through is assumed to be incomplete in the model.Since oil exports account for a high percentage of export earnings and finance a significant portion of government spending in Iran, the analysis of different monetary policy responses to commodity terms of trade shocks in an oil-exporting country, like Iran, must be important.  This study aims at investigating the dynamic effects of commodity terms of trade shocks and evaluating the performance and the stabilization properties of various simple monetary policy rules for oil-dependent economies. Three alternative monetary policy rules have been considered: CPI inflation targeting (CIT) rule, non-traded inflation targeting (NTIT) rule, and exchange rate targeting (ET) rule. Different monetary policy rules are assessed based on the degree to which they minimize the volatility of selected macroeconomic variables as reflected by their impulse response functions.

The model is calibrated to match the key features of the Iran economy using data for the period 1991: Q1 to 2017: Q1. The series of Oil production and Non-oil production is obtained from the “Statistical Centre of Iran” The series of Interest rate and oil prices are obtained from the “Central Bank of Iran”. The series of production in the oreign intermediate sector and foreign intermediate good price are obtained from the “Archival Federal Reserve Economic Data”[1]. Other parameters were obtained from previous studies on the Iran economy and business cycle literature in the world. The model is calibrated to the Iran economy. The model is solved numerically and the parameter choices for the model are summarized in Table1.

The comparison of responses under different monetary policy regimes shows that CPI inflation targeting is superior to the NTIT and ET targeting when commodity terms of trade shock happen. For export productivity shock, the performance of the CIT rule is better than other examining monetary policy rules. Also, the real exchange rate, which is defined as a function of commodity terms of trade and productivity differentials, makes it possible to examine the role of export productivity shock on macroeconomic variations and test the existence of Balassa- Samuelson effect. Impulse responses to commodity terms of trade shock show increasing in total output and CPI inflation and decreasing in consumption and nominal exchange rate under three policy rules. The analysis also displays that commodity terms of trade shock induce lower responses of macroeconomic variables under CPI inflation targeting than under non-traded inflation targeting and exchange rate targeting. Under the export sector productivity shock, exported output increases while non-traded output decreases, possibly reflecting the symptoms of the Dutch disease. On the other hand, the dynamic responses of selected macroeconomic variables suggest the presence of the Balassa-Samuelson effect where an increase in productivity in the traded sector appreciates the real exchange rate and increases the prices of non-tradable goods through wage equalizations.

overall, when the economy is experiencing commodity terms of trade shocks or exported productivity shocks, CPI inflation targeting is relatively better than exchange rate targeting and non-traded inflation targeting in macroeconomic stabilization.

It is argued that application of the inverse of mill's ratio as a correction factor regression in Heckman’s two-step method leads to inconsistent estimates and the resulted elasticities are not reliable. To avoid inconsistency of sample selection bias, Shonkwiler & Yen (1999) introduce an alternative method. In this paper results of the two-stage Heckman method (1979) are compared with the estimated elasticities by Shonkwiler and Yen.  We use Iranian households' survey data to estimate demand elasticities for meat. Interestingly, the results of both methods are similar and there are no inconsistencies in the two-stage Heckman method. Both of the approaches show that, economic factors have greater impact on the quality of demand for meat than demographic factors. Also, estimated coefficient for all variables have the similar sign by the methods, but the magnitude of the resulted effects are larger for Shonkwiler and Yen estimators.

The topic of poverty has always been studied in the world. If we can break down poverty, we will have a better understanding of the changes in poverty .The purpose of this article is to show the status of poverty and its three dimensions in chronic and transient poverty in Iran using the raw data of the Iranian Statistical Center and drawing the three dimensional curve of poverty (TIP) using the Jenkins and Lambert (1997) method, the poverty status and its dimensions in Iran were studied and then followed by Chakravati et al .chr('39')s (2008) new analysis of the two components of chronic poverty and transient poverty and their extraction from total poverty over an 11-year period in the Iranian economy since. It was done from 2007 to 2017. Finally, the effect of three dimensions of poverty on chronic poverty and transient poverty was calculated based on Shapleychr('39')s method The results obtained from Income Poverty show that at any given time, nearly 60 percent of Iranchr('39')s population is below the poverty line. Poverty intensity is 0.54 and income inequality among the poor is 0.34 .Chronic poverty accounts for 84 percent of total poverty in Iran. Also, the share of poverty incidence and the intensity of poverty and inequality among the poor on chronic poverty are 47%, 35% and 18%, respectively. and the share of the three dimensions of poverty on transient poverty is 65%, 7%, and 28%, respectively. Chronic poverty is strongly affected by poverty incidence and the intensity of poverty and transient poverty is more affected by poverty incidence than other dimensions of poverty.

Poverty reduction is one of the main goals of policies pursued by governments. The concept of pro poor growth focuses on the interaction between three elements: growth, poverty and inequality. On the other hand, pro poor growth is affected by several factors, including macroeconomic policies. The purpose of this paper is to investigate the effect of Openness on pro poor growth during the period of 1982-2015. For this purpose, we estimate this relation by using ARDL method with time series data. The result shows that the openness of the economy has led to the improvement of the situation of the poor, due to the introduction of technology, increased productivity, more efficient resource allocation and promotion of innovation. So it is suggested that, the government pursue the removal of barriers of free trade and membership of the WTO. Although the success in this field is to create appropriate infrastructures and institutions.

What has been mentioned most in international documents and reports is the which implies incidence, intensity and income inequality among poor people. The purpose of this article is to show the situation of poverty in Iran. The main progress of the present study in the field of poverty research is that using the raw data of the Statistics Center of Iran and plotting the poverty dimension curve (TIP) and using the Jenkins and Lambert method in a period of ten years since 2008, the situation of poverty and its dimensions examined the impact of poverty incidence and the intensity of poverty and income inequality among the poor in Iran. The results show that total poverty during the mentioned period has a relatively downward trend with a gentle slope and the highest total poverty is related to 2009. An examination of the dimensions of poverty also shows that in each period approximately 60percent of the population of Iran was below the relative poverty line and the calculated intensity of poverty indicates that the poor are 54% away from the desired situation and income inequality between the poor 34percent  is estimated . During this period, poverty incidence and income inequality among the poor in the Iranian economy has had a relatively stable trend. In addition, the trend of  intensity of poverty in the years2008  to 2010 had a relatively constant trend, but from 2010 to the end of the period has decreased with a slight slope.

Poverty reduction is one of the main goals of policies pursued by governments. At the same time, economic growth and a strong belief in growth along with justice have always been of interest to policymakers. In this regard, the concept of pro poor growth focuses on the interaction between three elements: growth, poverty and inequality. On the other hand, pro poor growth is affected by several factors including macroeconomic variables. The purpose of this paper is to investigate the effect of macroeconomic variables including government expenditures, transfers, liquidity, openness, oil revenue and external debt on pro poor growth during the period of 1982-2015. For this aim, first, we calculate pro poor growth index and then by using the time series data of desired macroeconomic variables and by ARDL model we estimate that relationship. The results show that all macroeconomic variables, except transfers and openness, have a negative and significant effect. In other words, by increasing liquidity, external debt, oil revenues and government expenditure, the share of poor people from economic growth will be less than the rich. Therefore, it is suggested that the government should change the path of economic growth by improving infrastructure and increasing social spending in the field of education and health, as well as directing liquidity towards productive and employment activities and allocating oil revenues to improve the infrastructures so the benefits of the poor will be more than the rich from economic growth, and the goal of reducing poverty and inequality would be achieved. Also, in spite of the positive effect of transfers and the openness of the economy on pro poor growth, it is suggested that the accurate identification of poor people and the targeting of subsidies, as well as the removal of barriers of free trade and membership of the WTO, along with the establishment of appropriate infrastructures and institutions, will increase the effectiveness of these macroeconomic variables.

Investigating the effect of the exchange rate on economy and the responses of monetary policy to shocks under incomplete exchange-rate pass-through (ERPT) is one of the main issues in Iranian economy. The exchange rate has a significant effect on inflation and terms of trade, and it transfers the effects of different shocks through import prices and the consumer price index to the whole economy. The exchange rate has an absorber or amplifier effect on shocks, playing an important role in implementation of monetary policy. But the important thing is that the rate of absorbing or raising depends on the exchange rate pass-through. Therefore, the exchange rate pass-through is significant in terms of monetary policy performance. The present study first examines the incomplete exchange rate pass-through effect on Iran economy and its implication on monetary policy under the framework of a Dynamic Stochastic General Equilibrium model, and then it analyzes the effect of different degrees of pass-through under terms of trade and export productivity shocks on Iranian economy. The results indicate that terms of trade shock leads to increase in total product, none tradeable product and CPI inflation and it also decreases oil product. on the other hands, export productivity shock increases total product and oil product and decreases none tradeable product and CPI inflation. The analysis of the effect of different degrees of an Iran economy shows that: the higher degree pass-through decreases effect of exchange rate volatility on imported inflation and CPI inflation, and also in these conditions the effect of the monetary policy of the exchange rate channel on economic variables is reduced. In addition, the incomplete exchange rate pass-through will reduce the impact of shocks on the economy. In other words, the exchange rate with incomplete pass-through absorbs some of the effects of shocks.

In consumption demand studies, we can consider that choice of quality is affected by consumption decisions (whether to consume or not). The term “quality” refers to any subjective factor that motivates consumers to pay for a good more than its substitutes. Any change in a consumption explanatory variable has two effects: 1) the probability of consuming the good and 2) considerations of quality. The aim of this paper is to examine the effect of factors such as demographics and socio-economic factors on choice of quality in meat consumption including livestock and aggregated meat (livestock, poultry and aquatic). Furthermore, we estimate quality elasticities using cross-sectional survey data for year 2014 among Iranian rural and urban households. The paper applies Heckman two-step method to estimate unknown parameters of participation and consumption equation. Our findings show that the most important variable affecting the choice of meat quality for consumption is household income. In this study, the quality elasticity of income in meat consumption is positive in all samples and there are other variables (gender, age and education of household breadwinner) which have significant effect on quality choice in meat consumption.

One of the fundamental problems in regional economic development is determining the ways in which government can allocate resources of society so that economic growth and income equality among provinces can be achieved simultaneously. In this study, a Vector Auto Regressive Model is estimated using seasonal data during Q1: 2000- Q4:2009. Inter-provincial income inequality is obtained with both Gini Coefficient and Theil Index. The results show that, in short run, income inequality among provinces accelerates economic growth and in long run decelerates it, however, it does not return to its initial level. Economic growth in short run accelerates income inequality among provinces, but decelerates it in long run. Robustness tests with Theil Index, confirm our primary results applying Gini Coefficient.

 The overall aim of this study is to construct confidence interval for the optimal size of income inequality, i.e., that size of income inequality which is embodying optimal economic growth in Iran concerning 1353-1391. This size is called to the threshold limit. i.e., the size of income inequality more this limit, has a negative effect on economic growth. Using Hansen two - regime threshold regression model, a relationship was obtained between the effects of income inequality threshold level and economic growth. Then, bootstrap test was done to test linear hypothesis at problems of existence of threshold method. Finally, likelihood ratio was used to obtain the confidence interval for threshold. The results show that income inequality in Iran follow up threshold two regime methods that was 0.417. Also, likelihood ratio test result indicates that the threshold level of income inequality is within the confidence interval .

The Armey curve demonstrates a non linear relationship between government size and economic growth. This study used threshold regression approach in order to test the Armey curve relationship between government size and economic growth in Iran. Two sector production function proposed by Rati Ram (1986) and three indices of government size are used in this paper. The results reveal that a non linear relationship between all indices of government size and economic growth does not exist in Iran.

Inflation has always been an economic problem and different solutions have been proposed to control it. Although it is said that “higher output lowers inflation rate” but it is true when other factors are constant. This study searches the answer to the following question: “what is the effect of inflation rate and output in a case that inflation rate and output growth has a volatility trend?” To this aim we use seasonal data on Iran’s gross domestic product and consumer price index from spring 1975 to summer 2008 and an exponential generalised autoregressive conditional heteroskedasticity (EGARCH) model to show volatility the variables. The results of this study show that there is an autoregressive conditional heteroskedasticity (ARCH) process in the output growth and inflation rate. We also find that the inflation rate and output volatility increase Inflation rate and the output volatility higher output growth. The hypothesis that the inflation rate volatility lowers output growth can not be accepted.

Fars province, with the population almost equal to the 6.5 percent of the total country population and noticeable geographic-wide and remarkable facilities and suitable economic-social capabilities, always has been encounter to defects and shortages. Thus, understanding of povertystatus in urban and rural areas of the Province can make a suitable predisposition for the short and long run policy makings in order to province development. With regarding to it, the poverty status in rural and urban regions is being considered during the years 1995-2007. For that purpose of presentations of poverty definitions and its kinds and reviews on literatures, absolute poverty line is determined on the basis of fifty percent of median household expenditures, and then the poverty indices like headquant ratio, poverty income gap ratio, severity of poverty, Sen index and Kakwani index are calculated for the urban and rural areas of the province. The results of poverty indices show that the annual absolute poverty line in urban areas is more than rural areas and poverty indices trend in urban and rural areas show the decreasing poverty trend in these areas during the period of this study.

Subsidies and indirect taxes are important instruments in order to implement government policy aimed at poverty reduction. This paper develops a methodology to assess subsidies and indirect taxes from poverty reduction aspect. This method helps us to know whether subsidies and indirect taxes are pro poor or not. A fiscal policy can be said as pro poor if it benefits the poor proportionally more than the non poor. For this purpose, in the viewpoint of poverty the concept of elasticity of Foster, Greer, and Torbeque poverty index with respect to prices is used and then the pro-poor index for prices is derived we use the index to assess the indirect taxes and subsidies. The results of this research during the years 1379-83 in urban and rural areas in Iran indicate increasing in price of food items hurt the poor more than the rich and subsidizing these items (excluding beverages and tobacco) have been pro-poor. how ever, an increasing in price for items like health and care, transportation, communication and education hurt the rich more than the poor, and the rich benefit more than the poor from these subsidies.Therefore,a review on studies tax program in order to reduce inequality and improve welfare seems to be necessary.

The government fiscal policy can be said to be pro-poor if it benefits the poor more than the non-poor. In this research by using the concept of social welfare it states that which goods and services should be subsidized or taxed to maximize social welfares. For this purpose, in the viewpoint of welfare the concept of elasticity of Atkinson social welfare with respect to prices is used and then price reform index is derived and finally this index is used for assessing indirect taxes and subsidies.The results of this research during the years of 2000-2005 in urban and rural areas in Iran, indicate increasing in price of food items hurts the poor more than the rich and subsidizing these items (excluding beverages and tobacco) have been pro-poor while the increasing in price of the items like health care, transportation, communication and education hurt the rich more than the poor and the rich benefit more than the poor from these subsidies. Therefore, view in the subsidy and taxing on the mentioned sectors for purpose of reducing the inequality for welfare improvement and thus reform is seemed necessary.

Economic growth and poverty alleviation have been among the most important government policies in Iran for the past three decades. This paper examines the effect of economic growth on the poverty reduction in Iran using various methodologies and approaches for the period 1995-2003 Main findings of the paper show that poverty incidence in urban and rural areas of Iran has declined, however, the intensity of poverty has declined in urban, but increased in rural areas. Furthermore, measurements of indices such as the poverty incidence,, poverty-growth curves, and the poverty equivalent growth indicate that economic growth in most years has been weakly pro-poor in both urban and rural areas, confirming the trickle down effect of growth.

This article exploits the conventional micro and macroeconomics relations such as production functions, costs and so on, in order to simulate Iran's economy in the form of a computable general equilibrium model. We use the Mixed Complementarity Problems (MCP) technique along with the GAMS software & its modeling process. The purpose of this study is to investigate the consequences of both decreasing the agricultural sector (agricultural activities) subsidy, and the changes of the labour tax on the sectoral production and revenue of urban and rural households. This purpose we use the latest social accounting matrix (1375). The results reveal that the reduction of agricultural sector subsidy will have a negative impact on the production of all other sectors. However, for agriculture sector the percentage of this negative impact is more significant than other sectors. Also its negative impact on the urban and rural revenue is considerable. The same situation is encountered for the changes in the labour tax. A rise of the laboure tax has negative impact on all other sectors but its reduction does not have any considerable positive impact on them.

However the traditional tax policy designed seems to be realistic and does not rely on the political attitudes, but it is not reflexible and dynamic and therefore not desirable, because of the restricted and narrowed tax base. Thus, moving to a variety and broaden tax base to enhance the ability of observing revenue would be necessary. So tax reform, as making the old indirect tax system rational and replacing by a value-added tax should be inevitable. The government of Iran decided to act in this manner. The main aims of this paper are to predict value-added revenues and determine its minimum applicable rate. In this regard a model to simulate value added-tax revenues for economy of Iran, that highly rely on the indirect tax, included sales, excise tax and import tariffs, is introduced. The study shows that the potential tax base for the ordinary Mackenzie model and also for the model proposed in this paper is 20. 8 percent of the gross domestic product. The government should apply the minimum tax base equal to 11. 66 percent under value-added tax, if it is decided to yield as much revenue as the prevailing tax system.

The main objective in this paper is twofold: measuring technical efficiency and indicating its determinant factors for the Iranian insurance companies. We utilize stochastic frontier function and two alternative models: the “error component frontier”model proposed by Battes and Coelli (1992) and”technical inefficiency effect” model proposed by Battes and Coelli(1995). the parameters of both models are estimated by maximum likelihood method. Earned premium and investment income selected as outputs of insurance industry. Panel data of Iran, Asia, Alborz and Dana –the four insurance companies-over 10 years,(1922-2001); used to measure their technical efficiencies. The findings of this paper show that technical efficiency is equal to 79.30% in error component model and 81.71% in technical inefficiency model from earned premium point of view and 58.51% in error component model and 59.64% in technical inefficiency model from investment income point of view. Further results indicated that technical efficiency has direct relation with respect ratio of the number of branches located in Tehran, total assets, ratio of life insurance premium, ratio of non- life insurance premium and inverse relation with respect to ratio of employees qualified with bachelor’s degree.

This paper examines the relationship between growth and poverty in Iran during the first five-year plan. In other words, effort has been made to show whether economic growth in Iran helped poor people or not. For this purpose the concept of pro poor growth has been analyzed with application to the economy of Iran, both in urban and rural areas and in the country as a whole. We use an indicator of pro poor growth in order to determine the degree to which poor people benefited or lost from the economic growth in Iran. The results indicate that during the period of 1988-93, the extent of poverty declined in Iran. The decomposition of changes in poverty into ‘pure growth effect’ and ‘pure inequality effect’ showed that the former effect is negative and the latter is positive both in urban and rural areas and in the country as a whole. Pro poor growth index measured by poverty indices as headcount ratio, poverty gap ratio, and Foster-Greer-Thorbecke index shows that economic growth both in urban and rural areas and in the country of Iran is pro poor. Thus, according to findings in this paper, economic growth helps the poor people.

Agricultural sector has long been strongly supported in Iran. The main purpose is to show the relationship between price support and total factor productivity growth. This study is restricted with the lranian agricultural sector and data has been gathered in the period from 1987-88 to 1998-99. The selected crops include wheat (irrigated, rain - fed), barley (irrigated, rain -fed), rice, cotton, sugerbeet and potato. Using by pooled cross section and time series data and the suitable model, efforts have been made to answer the following questions. Is there any relation between price support and proudctivity growth in agricultural products? Is the impact of price support and the productivity growth in agricultural products the same results across different crops? The results show that the average productivity growth in irrigated crops is negative and in rain‎- fed crops is positive. Also, the statistical test demonstrates that productivity growth is positive and significant at ten percent confidence interval for only three crops, that is to say: wheat (rain-fed), barley (rain-fed) and sugerbeet.