Investigating the Asymmetric Effects of Open Economy Indicators on the Gini Coefficient of Income Deciles in Iran

The purpose of this article is to analyze the impact of open economy indicators including economic openness and foreign direct investment on income distribution in Iran during the years 1996 to 2018. For this purpose, we use fuzzy regression with asymmetric coefficients. The reason for using it is very high flexibility in analysis. For each income decile, an optimal model is estimated that shows the effect of open economy indicators on the Gini coefficient of income deciles. The results show that the average effect of foreign direct investment on the Gini coefficient of income deciles is zero or very small and reduces inequality. But the maximum impact of foreign direct investment on the Gini coefficient of income deciles has increased, which leads to inequality in income distribution. This is due to the lack of appropriate programs and policies in the economy, so that we can use the opportunity of foreign direct investment to reduce inequality. Also, the results show that the maximum effect of the degree of economic openness on the Gini coefficient of income deciles is zero, which means that the degree of economic openness does not increase inequality. In order to strengthen or weaken foreign relations. Therefore, the amount of subsidy paid to each of the income deciles provides the infrastructure needed to attract foreign investment and provides measures for the treasury to tax the income deciles.