In collaboration with Payame Noor University and Iranian Association for Energy Economics (IRAEE)

Document Type : Quarterly Journal

Authors

1 Professor of Econometric and Social Statistics

2 Ph.D. Student of Economic Siences, Department of Economics, Semnan University, Iran

Abstract

Is economic growth in Iran affected by post-Keynesian economists theory? Is it possible to overcome economic recession in Iran using the post-Keynesian approach? According to the post-Keynesian point of view, the economic growth is either wage-led or profit led. In other words, the functional distribution of income determines the economic growth variation path. In this paper considering profit share, capacity utilization, capital accumulation, and net export/GDP ratio during 1967-2013, economic growth path in Iran is determined using Structural Vector Auto Regression (SVAR) concerning the Impulse Response functions. The results show that increase in profit share increases capital accumulation, net export share of GDP and total demand or economic growth. Thus total demand regime or economic growth is profit-led. The result of this research approves the theoretical results of Bhaduri and Marglin (1990); concerning the income distribution effect on international trade in an open economy, the possibility of profit-led regime increases and may help to overcome the recession.

Keywords

Main Subjects

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