The Effect of Macroeconomic Instability on Social Development in Iran

Social development is a process of changes that leads to improvement in human well-being. Human well-being means access to better education, better health, and the resources required for basic human needs. On the other hand, the macroeconomic condition of each country is an effective factor in this issue. Therefore, in this paper, we examined the effect of macroeconomic instability on social development in Iran between 1352 through 1396. To measure the social development, we used two variables of human development index and under-five child survival rate and to measure macroeconomic instability, we combined four variables, the GDP volatility, the terms of trade volatility, the investment volatility and the private consumption expenditure volatility. The results showed that macroeconomic instability has a negative and significant effect on the human development index and the under-five survival rate in the long run, which reflects the negative effects of macroeconomic instability on social development. Also, in the short run, there is no significant relationship between the relevant variables and social development.