The Impact of Government Economic Expenditures During Recession and Boom Periods on Iran’s Social Welfare (NARDL Approach)

One of the goals of the government is to achieve to economic balances for eliminate fluctuations and improve the social welfare of citizens.The purpose of this study is to examine the impact of government expenditures in economic affairs and related chapters on the Amartya Sen social welfare index during business cycles in Iran’s economy. In this regard, the nonlinear autoregressive model with distributed lag (NARDL) has been used during the time period of 1973-2019. The results show that the positive shocks of government expenditures in economic affairs and chapters of agricultural, water resources, industry and mining, trade and cooperation, energy, housing and development, environment, and the negative shocks of government expenditures in economic affairs, the chapters of water resources, information technology, trade and cooperation, transportation and energy during business cycles have caused increasing social welfare significantly. Also, in the positive shock of government expenditures in information technology chapter during periods of boom and transportation chapter during periods of boom have caused increasing and decreasing social welfare respectively, significantly. Also, in the negative shock of government expenditures in the housing, development and industry and mining chapters increase social welfare during periods of recession and boom, respectively. In the negative shock of government expenditures in the chapter of environmental during boom periods has reduced social welfare, significantly.