The Impact of Government Size on the Resistance Economics Index of Iran: Vector Autoregressive (VAR) Approach

Due to the impact of the global space, as well as its abilities in various scientific, commercial, political and energy fields, the Iranian economy has always been in a state of intolerance in international relations; it seems that the proposed economic rehabilitation plan is more than an existential necessity and is a defensive and sophisticated tool of the Iranian economy that can take an active approach to economic crises and to overcome obstacles in this situation. The purpose of this study is to investigate the effect of government size on the resilience index of Iranian economy and it is very important. In this study, Vector Autoregressive Method was used to estimate model and Johnson-Juselius co-integration method was used to investigate long-term relationship between variables. Findings show, the size of government affects Iran’s economic growth positively. The Schwartz-Bayesian criterion was used to determine the optimal length of interruption, and the optimal interruption interval was estimated one. According to Unrestricted Cointegration Rank Test (Trace), there are four convergence vectors between model variables and the Maximum Eigenvalue test confirms the existence of two convergence vectors between model variables. A shock in government size has boosted the resistance index of the Iranian economy. This increase has been fluctuating by the 10th year, after which it has been steadily increasing, and has continued until the 30th.