Iranian Economic Review
Volume:28 Issue: 74, Winter 2024

The current study intends to securitize the asymmetric link between tourism and the deficit in the balance of payments of Pakistan. To this end, the study deploys the annual data from 1976 to 2019, applying a novel cointegrating approach, viz, asymmetric Autoregressive-Distributed Lag technique. The findings confirm the non-linear cointegration among the selected series. Additionally, the results reveal that the deficit in the balance of payment responds to the positive and negative changes in tourism atypically. Besides, the balance of trade deficit, real effective exchange rate, and fiscal balance deficit exhibit a direct association with a balance of payments deficit. Based on the outcomes, the study recommends some crucial policies to encourage the tourism sector in Pakistan as it has significant potential to reduce the deficit in the balance of payments.

Achieving economic development through financial markets is one of the most important ideals of any society. The purpose of this study is to investigate the relationship between financial development and sustainable economic development for selected countries in Asia over the period 1993-2021. To this end, the relationships between financial development and economic development indicators for two groups of countries in Asia are measured based on their income levels using the panel ARDL estimation method and the pooled mean group (PMG) estimator method. The results show that for selected low-income and high-income countries, there is a long-term relationship between the variables, and there is a direct significant relationship between the financial depth index, financial inclusion index, economic growth rate, urban growth rate, energy intensity, and sustainable development index (SDI) variables. The better these variables are, the more favorable the sustainable economic development is in these countries, but the relationship between the money supply and the SDI is inverse and significant. As practical policy implications, it is suggested to improve the efficiency of financial markets, strengthen the role of the financial sector in national production, and regulate the relationship between finance and industry.

Remittances are a great source of foreign exchange earnings for India as the country receives the highest amount of these inflows among other countries in the world. These inflows as they constitute a major part of the country’s external inflows may have important implications on the macroeconomic variables of the country. In this paper, the main objective is to study the Dutch disease impact of remittances in the Indian economy. The Autoregressive Distributed Lag (ARDL) model is used for analyzing the Dutch disease impact of remittances using time series data from 1980-2019. The findings reveal that remittances do have a Dutch disease impact on the country by appreciating the real exchange rate and through contraction of the manufacturing sector of the country. The paper suggests that utilizing remittances in productive investment rather than on consumption can counter the side effects of remittances and will induce growth of both tradable and non-tradable sectors of the country.

This study investigated the feasibility of equipping merchant ships of the Persian Gulf and the Sea of Oman in southern Iran with solar-electric propulsion systems from the perspective of private and public sectors in 2019. The cost-benefit analysis approach was used. The results indicated that 0.26 units of profit is obtained for each unit of cost from the perspective of the private sector and the payback period is 18 years. Thus, replacing solar electricity is not cost-effective. The results of the social cost-benefit analysis revealed that this technology is economically viable for society by considering the benefits of reducing pollution. In addition, the results of sensitivity analysis in the financial cost-benefit case of the discount rate and the annual fuel price of ships indicated that if the discount rate (financing opportunity cost for the private sector) is less than 5% or the average annual price of fossil fuels increases by 40%, the project will be financially viable from a private sector perspective.

Central bank innovations in terms of monetary and macroprudential policies and their interaction with the economy could have a non-linear effect on financial stability in Indonesia. There exists an optimal threshold level from which the central bank rate and macroprudential policy index affect financial stability. This study employs threshold autoregressive (TAR) methodology on Indonesian data to examine the effect of monetary and macroprudential policies on the growth of credit over the period 1990Q1 to 2020Q4 in Indonesia. The result indicates that TAR regression is significantly better than linear regression. In particular, TAR estimation reveals that the central bank rate and macroprudential policy index threshold levels were 7.3 and 0.145, respectively. Monetary policy tends to promote financial stability when the policy rate is above the threshold. It reveals that in periods with high macroprudential policy index, tight monetary and macroprudential policies promote financial stability. This indicates the need for policy coordination to foster sustained financial stability.

This paper tries to examine the effect of Microfinance on sustainable development in a group of Middle East and North African countries (MENA). Can we consider Microcredits are performing instruments for sustainable development in MENA countries? To answer this question, we chose a period from 1990 to 2018, and a sample of 10 MENA countries was selected. In the empirical analysis, we examined the linear fit of this long-term relationship within an error correction (ECM) model. We found that micro-financial institutions will correct 67% of sustainable development imbalance as the speed of adjustment brings this imbalance back to a stable state in the long term. Subsequently, we adopted the GMM method to determine the dynamics of sustainable development. Our results showed that women's participation in economic life in the MENA region does not have a significant impact on sustainable development. The research paper advises ending the gender disparity in employment, which will enhance women’s likelihood of gaining access to formal financial services. It also advises boosting women’s financial education which will lead to strengthening their financial capacities. This advice will help to reach sustainable development at the country’s level.

This paper investigates the impact of government expenditure on gender unemployment in Nigeria, capturing the impact of Labour market institutions in explaining unemployment behavior from 1991 to 2018. This study employed augmented Dickey-Fuller and Philip Perron unit root tests and Engle-Granger cointegration tests. The study used the fully modified ordinary least squares (FMOLS) estimation technique to examine the effects of government expenditure on gender unemployment. The study revealed that macroeconomic variables of capital accumulation, capital, and recurrent expenditure sufficiently explained the behavior of gender unemployment in Nigeria. On the other hand, Labour market institutions indicators (Tax wedge & minimum wages) are not significant in explaining gender unemployment in Nigeria. The study further showed that, of the two genders, females benefited more from Government expenditure. Therefore, this study recommends that the government should invest heavily in social overhead capital (infrastructure) as this will attract more foreign and domestic investments and, in turn, reduce unemployment among both genders.

Human welfare largely depends upon the earnings of individuals. Earnings reduce poverty, increase wealth, and accelerate economic development. Therefore, it is appropriate to thoroughly investigate the factors responsible for earnings. Various factors of earnings have been described and discussed in previous research work. The current study aims to examine the impact of institutional factors like job sector, harassment, status of the job, and job satisfaction on earnings of the working women in addition to the human capital variables using primary data directly collected from the respondents. Data were collected from 789 respondents in 2019 and in ten randomly selected districts of the Khyber Pakhtunkhwa (KP) province of Pakistan. The regression model was estimated by the Ordinary Least Squares (OLS) technique after fulfilling the assumptions of normality of residuals, heteroscedasticity, multicollinearity, and model specification tests. Regression results are in line with the previous research work showed that education and experience have a significant positive impact on the earnings of the working woman. Earnings of public sector employees exceeded private sector employees’ earnings. The status of the job revealed an insignificant impact on earnings. Job satisfaction and harassment also indicated an insignificant impact on earnings. It is concluded that institutional factors except the sector of the job have no influential impact on the earnings of working women in KP.

Creative industries are growing rapidly and have a high potential for employment and income creation. The growing importance of creative industries in increasing the prosperity and development of countries has been confirmed by many empirical studies. These industries offer a new experience of economic value in a variety of products, both tangible and intangible, through the integration and transfer of extensive knowledge, skills, and innovations into all sectors of today's economy. According to UNCTAD, creative industries include traditional cultural industries such as publishing, media, television, film, performing arts and crafts, as well as modern and creative cultural industries and services such as advertising, architecture, design, and photography. The present study examines the effect of creative industries on the GDP of 98 developed and developing countries from 2011 to 2019. The generalized Method of Moments (GMM) has been used to examine and evaluate the research model. The results of this study demonstrate the positive and significant effect of "creative industries" including production and services in creative, cultural, and artistic fields on the GDP of the studied countries.

Using a two-step system generalized method of moment (SGMM) this study explored the role of institutional quality while analyzing the links between foreign direct investment (FDI) and domestic investment (DI) in 21 Asian developing and emerging countries from 2011 to 2016. Our empirical strategy indicates that the crowds-out and crowds-in effect of FDI on domestic investment depends on the chosen dependent variable. Using domestic private investment (DPI) as the dependent variable, the study confirms the crowding-out effects of FDI on domestic investment. Conversely, utilizing the gross fixed capital formation (GFCF) findings show that the FDI crowds in the domestic investment. It is also revealed that institutional quality matters in determining such nexus. The study further recommends the need to augment the positive role of institutional quality in such a way that the crowding-out effect of the concurrent increase in FDI and institutional quality will augur well for domestic investment.

The study aimed to examine the impact of COVID-19 and oil prices on economic policy uncertainty in the US, UK, and Brazil for the period March 16, 2020, to April 16, 2020, by using the panel-ARDL approach. The results show that Economic policy uncertainty is positively correlated with COVID-19, this indicates that an increase in COVID-19 can enhance economic policy uncertainty, Meaning that an increase in the new cases raises the uncertainty of economic policy in the US and UK in the short-run and long-run. The results also show that the Economic policy uncertainty is negatively correlated with the oil prices.

Common energy fields are one of the defining poles of energy diplomacy between countries. Iran's role with 28 common oil and gas fields in the Middle East, the world's fastest energy pole and the largest source of oil and gas, is very decisive. Among Iran's neighbors, Iraq is very important with the largest number of common fields. This study presented a qualitative and quantitative project risk assessment using a risk assessment matrix and the expected monetary value risk analysis to identify the most important risks of joint oil field projects. Accordingly, the two scenarios of the contract for the partnership in the production of the Sepehr and Jafir oil fields are compared with the oil contract for the buyback of the North Azadegan field by calculating the Expected Monetary Value for each Decision Tree Path. As a result, it is observed that by considering the risks obtained from the calculations of the risk assessment matrix in each contract, and also with the equal risk share, the production sharing contract has an expected monetary value equal to 7.228 billion dollars. This option also includes the lowest investment risk for National Oil. Also, by using the risk assessment matrix, we found that political conflicts are the largest share of risk and a deterrent to the development of oil fields, and the willingness of large oil companies to invest in Iraqi oil facilities confirms that the importance of political conflicts is much greater than lack of physical infrastructure risk.

The dynamic correlation between financial crises and declining economic activities progressively mandated analysts to distinguish the creating factors of financial instabilities and study their effects on the real economy. In some years of the last decade, Iran's economy has been encountering, on the one hand, sharp currency fluctuations and banking crises in the financial market sector and on the other hand, negative economic growth in the real sector of the economy. The objective of this study is to investigate the effects of financial stress on macroeconomic variables. The systemic stress index of Iran from (2008: 11 to 2020: 03) has been estimated using the basic portfolio theory. We have used an MSBVAR (Markov-Switching Bayesian Vector Autoregression Models) approach to analyze the effects of the financial stress index innovation on macroeconomic variables, our results show that the effect of financial stress innovation on economic growth, in low financial stress is negative and low, however in high financial stress, the variables reveal a strong negative reaction to financial stress. So the financial stress index can be utilized to gauge the solidness of the financial sector of Iran.

This research investigates the determinants of the rate of female labor participation in West Africa. We employ an autoregressive distributed lag technique on the panel data obtained from the World Bank and the International Labor Organisation (ILO) in order to examine the direction and the magnitude of the effects. The findings of this study suggest that a positive nexus exists between the levels of education and health of women and the rate of female labor participation. In the same way, a positive connection is observed between the rates of fertility and female labor participation. In agreement with some previous studies yet in contrast to others, a negative coefficient is established for the globalisation index: social globalisation is negative, political globalisation is positive, while economic globalisation confirmes both the positive and negative influence – although the negative coefficient dominates. This research, therefore, highlights important policy implications for the governments of the West African sub-region on how best to foster the participation of women in active employment.

In this study, using the behavioral economics approach and following Hursh method, we address the question of the extent to which the framing of questions about the demand for Iranian and foreign vaccines can influence COVID-19 vaccination intentions. The number of final respondents was 496, and the results showed that demand for foreign vaccines was higher than demand for Iranian vaccines at all levels of efficacy. When vaccine efficacy was 90%, demand for Iranian and foreign vaccines was 68.9% and 50.7%, respectively. The main model results showed: 1- Framing the vaccine development process increased the minimum efficacy required by people for Iranian vaccines by more than seven percentage points. This value confirms people's concern about the Iranian vaccine development process. 2- People's belief in the effectiveness of the flu vaccine decreased their minimum effectiveness by more than four percentage points. 3- Higher well-being of individuals' subjective socioeconomic status increased the rate of reduction in individuals' required minimum efficacy (from -4.29 percentage points to -7.58 percentage points). 4- The very high willingness of individuals to be vaccinated reduced the minimum effectiveness required to more than eight percentage points. The coverage curve estimate also indicated that at a 60% coverage rate, the level of information and promotion should be about 96.8% for the Iranian vaccines and 89.3% for the foreign vaccines.