Iranian Economic Review
Volume:18 Issue: 36, Winter 2014

This paper studies technology adoption in a duopoly where the unbiased technological change improves production efficiency. Technological progress is exogenous and modeled as a jump process with a drift. There is always a Markov perfect equilibrium in which the firm with more efficient technology never preempts its rival. Also, a class of equilibria may exist that lead to a smaller industry surplus. In these equilibria either of the firms may preempt its rival in a set of technology efficiency values. The first investment does not necessarily happen at the boundary of this set due to the discrete nature of the technology progress. The set shrinks and eventually disappears when the difference between firms’ efficiencies increases.

This paper identifies the comparative advantage and the rank of the manufacturing industries of IRAN using traditional and environmental variables. To do so, in the first stage, manufacturing industries are ranked according to employment, value added and profitability and then air pollution indices are added into the analysis. The development levels of manufacturing industrie s are calculated using numerical taxonomy method at 2-digit industry levels. The results showed that the comparative advantage of Iranian manufacturing industries, regardless of the indices of sustainable development and when these indices are to be taken into account are distinct from each other. In the first stage, the manufacture of other non-metallic mineral products, manufacture of basic metals, manufacture of chemicals and chemical products and manufacture of food products and beverages are ranked highest in 2005 respectively. But when air pollution indices were added into the analysis, the manufacture of other non-metallic mineral products has lost its advantage. Thus, with regard to indices of sustainable development, the comparative advantage is not a sufficient indicator for ranking of industries in terms of their performance.

he current study aims to explore the relationship between the two main macroeconomic variables, the export and economic growth,based on the export-led growth hypothesis (ELGH) in India for the period 1960 to 2010. The ELGH is an economic strategy used in the international trade policy of some developing countries for tracing the impact of trade on their economic growth. The ELGH is tested by the co-integration, error correction modeling and Granger causality approach. The results of the study show that there is evidence of unidirectional causality between export and economic growth for India. In fact, the economic growth causes export growth.

In present study, the impacts of production subsidies elimination on production, export, import, employment, and different macroeconomic variables have been evaluated based on a Computable General Equilibrium model (CGE) for Iran's economy. The model applied the Iranian input-output table data of year 2002. Three scenarios include 25, 50, and 100 percent reduction in production subsidizing rate were analyzed, respectively. Results did not show any significant change in production and employment rate in oil and mineral production sectors, but implied a reduction in production, employment rate and exports of industry, agriculture and service in all scenarios. It found the food industry was the most vulnerable part of Iran's economy, so paying more attention to growth rate of agriculture and food industry may inevitably facilitate the elimination policy of production subsidies. With regard to negative consequences of production subsidies elimination overall agricultural sector, the agricultural products need more support on productivity growth in factors of production.

The economic convergence concept arises from the Solow-Swan growth model. Accordingly, two hypotheses are considered: absolute and conditional convergence. The first implies the convergence of economies towards a steady-state. The second hypothesis is based on the convergence of each economy toward its own steady-state. Indeed, it refers to different structures of economies. In experimental studies, for testing the conditional hypothesis, different determinants are entered in the growth model to capture the differences in structures. However, one coefficient is estimated for β-convergence and one convergence speed is obtained. This paper examines the convergence hypotheses for Asian countries over the period of 1999-2009 using the geographically weighted regression (GWR) approach. GWR provides useful means for dealing with spatial variation in convergence speed. In this way, convergence coefficients can be computed for considered countries. The results show that, speed of convergence varies over different countries. Also, the spatial variation of steady- state incomes is significant.

This paper investigates mate selection behavior with respect to both class position and individuals characteristics in the marriage market. The theoretical prediction of model can suggest not only those ones that belong to upper and lower class will marry within own class but also they can form the interclass marriage. Accordingly, the hypothesis is that the persons in upper and lower classes marry within own class. Logit regressions show that the ratio of probability of intraclass to interclass marriage decreases as partners belong to upper and lower classes in Tehran. This result indicates that partners’ differentiations measured by love and quality in family formation, are important determinants in mate selection rather than class position of individuals in a traditional society such as Tehran.

The aim of this paper is to examine the causal relationship between social capital and financial development in Iran emphasizing longrun relations during 1983-2012. To do so, we used the number of annual judicial cases in public courts per thousand individuals as an inverse indicator of social capital and the ratio of bank claims on the private sector to nominal GDP to measure financial development. Then we applied Vector Error Correction Model to estimate the proposed model. The results show that the inverse indicator of social capital has a negatively significant impact on financial development and there is a one-way causal relationship from social capital to financial development in Iran during the observation period.

Inflation has been one of the main economic problems over the last three decades in Iran. This paper investigates the growth of money supply (in terms of M1 and M2) and price nexus for Iran, through the cointegration and causality techniques. The main purpose of this paper is to determine whether inflation in Iran has been caused by excessive monetary expansion over this period, or whether the money supply has merely been passive in the inflationary process. It covers the seasonal data from 1988 to 2010. The Johansen cointegration test results suggest that the variables are not cointegrated. The findings also indicate that there is a bidirectional relationship between money supply (in terms of M1 and M2) and price level (in terms of CPI and WPI) during the period under study. These findings are consistent with the view that in a high inflationary economy, inflation does have a feedback effect on money supply growth and this generates a self-sustaining inflationary process.