The Evaluation of Allocating National Development Fund's Resources to Economic Sectors: Structural Macro-Econometric Modeling

In this study, the allocation of resources of National Development Fund (NDF) to economic sectors in foreign currency and Rial is evaluated by making a structural macro-econometric model that expresses the reality of Iran’s economy as much as possible. This model consists of 45 behavioral equations, 28 connecting equations and 88 identities. Behavioral equations are estimated by the ARDL approach in Eviews 9 software using annual data from 1959 to 2014. According to Theil’s U statistic and root mean square error (RMSPE), the simulation of endogenous variables indicates that model gives a good explanation of Iran’s economy mechanism. Regarding different scenarios for how to allocate resources of National Development Fund to different economic sectors, simulation results over the 2011-2014 period show that if 80% of NDF’s resources is distributed in proportion to the share of sector's investment in total investment in foreign currency and remaining 20% is allocated equally to agriculture and industry sectors in Rial, the highest rate of economic growth will be realized.