Economic Growth
mohammad ali ehsani; hamid La'l-e-Khezri; saleh taheri
Abstract
The unfavorable state of economic growth and government debt to the banking system are two major challenges for the Iran's economy. Given the importance of these variables in the macroeconomics, the study of the relationship between them using modern econometric methods can provide useful implications ...
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The unfavorable state of economic growth and government debt to the banking system are two major challenges for the Iran's economy. Given the importance of these variables in the macroeconomics, the study of the relationship between them using modern econometric methods can provide useful implications for policymakers. Therefore, the present study, with the application of the threshold vector autoregressive and spectral Analysis approaches during the period 1353-1395 reveals new evidence of the relationship between these two variables. The results show that government debt to the banking system has a dual and nonlinear effect on the economic growth. On the other words, if the ratio of debt to production is less than 18.2%, it has a positive effect on economic growth. Through crossing the estimated threshold, its destructive effect appears on economic growth. The impact of bank debt on economic growth is also non-linear and inverse. In addition, in the short and medium run, there is a causal relationship between these two variables. But, in the long run, the causality relationship from economic growth to government debt.
s
Saleh Taheri Bazkhaneh; Mohammad Ali Ehsani; Mohammad Taghi Gilak Hakim Abadi
Abstract
The 2007 global financial crisis showed that financial cycles is one of the reasons for the fluctuations of macroeconomics and could create business cycles. If there is such a relationship, adopting an active policy response to smooth financial cycles seems necessary. The present study investigates the ...
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The 2007 global financial crisis showed that financial cycles is one of the reasons for the fluctuations of macroeconomics and could create business cycles. If there is such a relationship, adopting an active policy response to smooth financial cycles seems necessary. The present study investigates the dynamics of the relationship between financial cycles with business cycles and the inflation gap in Iran's economy during 1990:1 – 2016:4. To accomplish this, first, a financial condition index for Iran's economy has been created. In addition, the causality test has been conducted in the frequency domain and available frequencies have been determined to predict economic growth whit the index. Then, in order to investigate the purpose of the research and analysis in the frequency domain and time-frequency domain, the new Maximal Overlap Discrete Wavelet Transform and Continuous Wavelet Transform tools are used. The results show the relationship between financial cycle and the business cycle in the short run and long run is bilateral and extremely unstable. In the medium run, the business cycle is a leading variable, but the phase difference between the two variables in the 1990s is different from those of the 2000s. In the medium run, the financial cycles have kept inflation away from its long run trend. But in the long run and after 2007, this relationship has been reversed. According to the results of the research, it is recommended that monetary policy makers, in addition to smoothing output and inflation around their long run trends, should also consider this for the financial sector so that the two objectives above can be achieved with lower error in different frequencies.
Economic Growth
Mohammad Ali Ehsani; Saleh Taheri Bazkhaneh
Volume 8, Issue 30 , April 2018, , Pages 133-145
Abstract
Post Keynesian growth model considers the use of production factors as a function of production and introduces demand as the main determinant of economic growth. Accordingly, Thirlwall (1979) presented a model suggesting that demand is restrained by the balance of payments deficit and turns into substantial ...
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Post Keynesian growth model considers the use of production factors as a function of production and introduces demand as the main determinant of economic growth. Accordingly, Thirlwall (1979) presented a model suggesting that demand is restrained by the balance of payments deficit and turns into substantial limitations to achieve higher economic growth rate owing to balance of payments deficit. This model is known as Thirlwall law or “balance of payments constrained growth model”. In this model the maximum rate of economic growth consistent with the balance-of-payments equilibrium is figured out using income elasticity of import and export. Identifying the barriers to achieving the target growth rate has been turned into one of the most controversial economic issues because of the challenges of low economic growth in Iran. Thus this study is going to provide an answer to the question that, based on Thirlwall law, Whether the balance of payments deems obstacles to the target growth rates of development programs for the Iran’s economy or not? To accomplish this, first the long run cointegration relationship of import and export demand functions was approved by autoregressive distributed lag model (ARDL). Then, regarding the importance of the elasticities of above functions on the results of the study and removing the structural instability of the model coefficients, time–varying parameter (TVP) and Kalman – filter were used to estimate the elasticities. Finally the validity of Thirlwall law was not confirmed during 1984-2013 applying Wald Test. Therefore, it can be claimed that aggregate demand has not restricted the economic growth through the balance of payments. Low income elasticity of import, combination of imports, restrictions on imports and dependence of foreign trade on oil revenues are the most important reasons for the results.
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mohamad ali ehsani; hadi keshavarz; Masoud Keshavarz
Volume 7, Issue 26 , February 2017, , Pages 125-144
Abstract
Monetary and fiscal policies are considered of high significance in the economic stabilization policies that are utilized to manage the demand side, but economic experts do not agree upon this policy and its results. This is worthwhile to mention that the source issues in the agreement or disagreement ...
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Monetary and fiscal policies are considered of high significance in the economic stabilization policies that are utilized to manage the demand side, but economic experts do not agree upon this policy and its results. This is worthwhile to mention that the source issues in the agreement or disagreement with this policy are the differences of opinions about the effects of this policy on the economy. This study attempts to investigate the effects of monetary and fiscal policies on the labor market fluctuations via the adjustment to the new Keynesian dynamic stochastic general equilibrium model in Iranian economy. After estimating the model using Bayesian approach, the model was simulated. The results of variance decomposition show that government employment was the largest role in explaining the fluctuations in unemployment and monetary shocks play the most important role in private sector employment. Impulser response functions also show that monetary shock, government employment shock and oil revenues shock reduce the total unemployment
