Articles
Publication Date: 2021
Iranian Economic Review (10266542)25(3)pp. 509-523
This paper uses a dynamic stochastic general equilibrium model to investigate the effect of fiscal and monetary policy on the stock market in Iran. Results show that a positive money shock leads to a rise in output, stock price index, and inflation. In addition, the response of the stock demand to money supply shock is negative. We found that a positive government expenditure shock led to a rise in output and inflation. The response of stock demand and stock price index to the government expenditure shocks are negative. Furthermore, results show that a stock market shock leads to a rise in output and inflation. © University of Tehran.
Publication Date: 2021
Resources Policy (0301-4207)70
The political history of Iran in the last 67 years shows that Iran has always been the target of sanctions especially oil-related sanctions imposed by other countries and international organizations. Oil sanctions in the form of export, extraction technology, and foreign financing are the most important sanctions that have had significant effects on Iran's macroeconomic variables. Therefore, in this paper an attempt has been made to analyze the impacts of the abovementioned sanctions on the Iranian economy in the form of a Dynamic Stochastic General Equilibrium Model with the New Keynesian approach. The simulation of amplifying the intensity of the shock of oil sanctions demonstrates that the oil sanctions in the oil industry, reduce the amount of foreign and government investment, extraction technology level and oil export which causes a reduction in oil production. In the monetary and exchange sector, the sanctions reduce the central bank's foreign reserves ratio to the money base which increases the nominal exchange rate and in turn, raises the non-oil exports and causes a drop in imports. Regarding the government sector, government oil revenues decrease and this calls for the creation of money and seigniorage by the central bank for financing budget deficits such that the government pushes the budget towards maintaining the current expenditure and falling capital expenditure. In the household sector, there are increases in consumption expenditure and decreases in investment expenditure due to the expected inflation and ultimately, there is an increase in domestic products due to an increase in non-oil exports and decreased import and this subsequently raises the inflation. © 2020 Elsevier Ltd
Publication Date: 2020
Journal of Economic Structures (21932409)9(1)
There are many reports on investigating the influences of institutional factors and Piketty’s Hypothesis on income inequality; nonetheless, the inequality effects of both factors are seemingly investigated separately. We hypothesize that economic freedom viewed as an institutional improvement or distortion has comparatively larger effects on inequality than the forces of income divergence introduced by Thomas Piketty. This article revisits the income inequality–(r–g) nexus and uncovers the role of economic freedom as an institutional indicator in explaining the relationship. Considering the latest inequality data of World Inequality Database (WID) and Standardized World Income Inequality (SWIID) for 82 countries over 2000–2017, an inequality model is estimated that explicitly captures the interaction effect of (r−g) and economic freedom. Reaffirming that economic freedom affects inequality in a non-linear form, we also found evidence that (r−g) raises inequality in the short run, demonstrating that preexisting holders of capital derive greater shares of income. Nevertheless, the effect of (r–g) is not as strong as that of economic freedom and is insignificant in highly unequal countries. This implies that institutional factors play a more important role than Piketty’s Hypothesis in the presence of high inequality. Furthermore, variables of inflation, gross savings rate, trade openness, and unemployment rate are shown to be the most consistently positive and significant factor and GDP per capita, government spending, natural resource rent, and tax revenue variables have negative and significant effects on the baseline estimations. © 2020, The Author(s).
