The Relationship Between Charity and Iran's Economic Growth

In traditional economics’ literature, wide range of studies have took place on affecting factors on economic growth. Theoretical and experimental studies have introduced several affecting factors. Being accurate in Islamic resources, shows that in addition to factors introduced in traditional economics’ texts, religious texts introduce charity as one of factors that increase revenues and assets. Religious texts not only does not count the charity as a factor of assets’ decrease, but also count it as a factor of assets’ maintenance and growth and a factor that brings moral and hereafter reward for the payer of charity. This article through Vertical Auto Regressive model (VAR) and Granger causality test, is to test the hypothesis that “there is a causative two-way relationship between charity and economic growth”. To do this, two variables of GDP’s growth rate according to 2004’s fixed prices and aggregate revenues (sum of special revenues and donations) of Imam Khomeini’s Relief Committee are used as an index of charity in Iran’s economy during years 1987-2013. Based on Dikki-Fuller test, both two variables are in a stable level and first difference grade is the optimum grade. Finally, the main hypothesis of the article claiming a causative two-way relationship between charity and economic growth was proved.