فصلنامه پژوهشهای اقتصادی (رشد و توسعه پایدار)
سال بیست و پنجم شماره 1 (بهار 1404)

 The purpose of this study is to investigate the multiple effects of energy substitution from technology development on the growth rate of economic-environmental indicators in Iran's agricultural sector using the translog cost function. While one of the main goals of improving energy efficiency with the implementation of the Energy Subsidy Targeting Law in Iran was to deal with the rapid growth of fossil fuels, but looking at the energy consumption situation in the agricultural sector, it is clear that not only with the implementation of this plan, the consumption of fossil fuels has not decreased, but also increased in coparison to the time span before the plan. The increase in the annual growth rate of energy consumption has created many environmental challenges. In this way, the amount of carbon dioxide emissions, which is the most important greenhouse gas in Iran's agricultural sector, has reached from 13,682 tons to 17,639 tons in 2019. In other words, the average increase in the annual growth of carbon dioxide emissions in agricultural sector during this period was equal to 28.92%. The implementation of some energy saving policies may have the opposite effect on energy consumption and the environment as well.

Translog cost function has been used to investigate the multiple effects of energy substitution from technology development on the growth rate of economic-environmental indicators in Iran's agricultural sector. The data used for the period 1988 to 2020 were collected from Central Bank, Iran Statistics Center, Ministry of Energy and World Food Organization.

The results has revealed that if the level of technology development increases, the substitution between capital and energy decreases and on the contrary, the substitution between labor and energy increases. The results have also shown that by reducing the amount of substitution between capital and energy, its negative effects on the economy and the quality of the environment are significant, and in contrast to the increase in the amount of substitution between labor and energy, it has a positive effect on the economy and the quality of environment. The higher level of technology development has increased the level of energy substitution.

The results of this research have shown that with an increase in the level of technology development on changes in energy consumption, the substitution between production factors in agricultural sector changes, which means that a 25% increase in technology development leads to an increase in energy consumption by 0.567%. In comparison, the changes in energy consumption are aligned with the development level of technology, which means that a small increase in the level of technology development leads to the rebound effects of energy. These energy feedback effects lead to an increase in substitution between capital and energy by 0.068% and a decrease in substitution between labor and energy by 0.412% compared to the initial level of technology development, but with a further increase in the level of technology development, the effect of energy feedback effects on energy substitution decreases. The results have  also shown that with an increase in the level of technology development in the targeting period of energy subsidy, the amount of energy return effects increases, but at a higher level of technology development, these energy return effects decrease in the agricultural sector. Therefore, it is concluded that in the early stages of technology development, which is at a lower level, its effects on energy return are significant, but with the development of technology at a higher level, its value has gradually decreased and does not remain stable. The results have also revealed that with an increase in the level of technology development, the degree of substitution between capital and energy decreases and on the other hand, the degree of substitution between labor and energy increases, and these effects are greater at a higher level of technology development. Therefore, increasing the level of technology leads to a decrease in investment and an increase in employment in the agricultural sector at the same time. In addition, it was found that by reducing the substitution between capital and energy, the negative effects on economic indicators and environmental quality are significant. The reason that the development of the level of technology in Iran's agricultural sector has had significant negative economic effects can be seen in the exhaustion of the technology used in the production of this sector. The application of these technologies, will lead to a higher cost of production which in turn result into a lower rates of profitability in the sector. Therefore, the incentive for production, investment and job creation in this sector decreases in the long term.

 Carbon tax is one of the most important policy tools in the field of energy, which is applied to the consumption, production or distribution of fossil energy, including oil products, coal, natural gas, etc. The purpose of carbon tax is to reduce economic and environmental effects caused by pollution by including environmental costs in the price of goods and services. This policy tool can bring positive economic and environmental consequences through changes in consumer and producer behavior. The purpose of this study is to investigate the effects of carbon tax on energy-intensive and non-energy-intensive industries in different regions of the world.

Since a CGE model can describe the interactions between different factors in macroeconomic systems and examine the effects of a policy at the global level, therefore, a dynamic multi-regional CGE model has been used to better understand the policy effects.

The results show that the carbon tax in all scenarios leads to an increase in the price of goods with high energy intensity in all regions, and the price of goods with low energy intensity decreases, except in the group of developed and high-income countries. Production in the energy-intensive and non-energy-intensive sectors is facing an average decrease. Imports in the energy-intensive sector, except for the group of countries with higher-than-average income, will decrease for other groups, and in the non-energy-intensive sector as well.

To investigate the effect of carbon tax on the industries of different countries, first the countries of the world were grouped into 5 regions based on the criteria of the World Bank and then 5 policy scenarios based on the report of the International Energy Agency were implemented in each region. For modeling, a dynamic calculable general equilibrium model was used in order to achieve more accurate results, and then important industrial consequences were obtained by solving the model. From the results of this research and the studies that have been carried out so far, it can be seen that what is decisive in the consequences of the implementation of the carbon tax is the region and the country implementing the policy. Based on this, the policy makers, considering the national and regional conditions and being aware of the possible effects of the policy, can include assumptions in the design and implementation of the policy in order to achieve efficient and appropriate conditions in the implementation of the carbon tax by reducing the negative effects. Based on the results of the research, it was observed that due to the differences in the regions, the macroeconomic effects in the industry will be different for different regions of the world. Therefore, one of the important points in the effort to bring the emission of greenhouse gases to zero is to pay attention to the differences in industries in different countries and the coordinated actions of the governments with each other for technical and financial support in order to accelerate the transformation of clean energy and reach the commitment goal. Since energy consumption is mainly related to production activities, especially production from energy-intensive industries, reducing greenhouse gas emissions from industry takes more time than some economic sectors. For this purpose, governments should present regular and specific programs to attract investments in the long term so that they can guide industries in the direction of deploying the most efficient technologies. The governments that implement carbon tax policies can also use the collected tax revenues to strengthen energy innovation. Therefore, industries that use unclean energy sources as production inputs, by upgrading production technologies, in addition to reducing production costs, can specialize in producing clean products

 Seigniorage, in addition to being a crucial economic tool, holds a significant position in terms of governance for governments. The way governments manage the power obtained through seigniorage can be influenced by granting independence to the central bank or by adhering to principles of good governance within social institutions. Good governance has several positive effects on government revenues and efficiency. While the use of seigniorage may initially appear as a natural right of governments, if it leads to a faster growth rate of money compared to economic growth, it can result in inflation and impose inflationary taxes.According to the theory of financial dominance, the practice of monetizing deficits undermines the independence of the central bank, rendering it unable to exercise proper monetary control and policymaking. In countries that are members of the OPEC cartel, where government budgets are often closely tied to oil revenues, budget deficits can be influenced by fluctuations in oil prices, which can incentivize governments to use seigniorage more frequently. Additionally, in the context of good governance, covering up government inefficiency and corruption can also serve as an incentive for increased use of seigniorage. This research focuses on exploring the relationship between good governance and seigniorage in OPEC member countries that have access to oil revenues.

This study has employed a panel vector autoregression model to investigate the relationship between good governance and seigniorage among the member countries of the Organization of the Petroleum Exporting Countries (OPEC) during the period of 1995-2020.

Among the OPEC members, four out of the six facets of good governance were found to have a negative correlation with the government's use of seigniorage. However, no statistically significant correlation was observed between other facets, namely changes in political stability and the absence of violence and terrorism, government effectiveness, and the government's use of seigniorage. The findings also indicated long-term effects of good governance shocks, as an institutional factor, on seigniorage, lasting for up to seven years. Therefore, this study cautiously confirms the negative correlation between the good governance index and the government's use of seigniorage. 

In OPEC member countries, where governments also control oil revenues, good governance can play a role in managing these revenues. Oil revenues have two effects on government decisions; an income effect and a monetary effect. In terms of income, it increases the government's available revenues, while in terms of money, it can contribute to the country's monetary base. However, unless the domestic equivalent of money is received from the central bank and introduced into the domestic economy, it does not lead to a change in the monetary base and inflationary effects. In countries with active and effective social institutions, better governance enables governments to use oil revenues more efficiently, often directing them towards investment funds to increase the country's wealth. Therefore, the impact of oil revenues on seigniorage in OPEC member countries is determined by the combined effect of these two outcomes. Furthermore, good and efficient governance by the government leads to a reduction in government expenditures, subsequently reducing the need for inflationary financing and the use of seigniorage. Good governance, considering factors such as responsiveness and the political costs of the government when using seigniorage, increases the costs and reduces the government's inclination to rely on inflationary financing. The research results did not indicate a negative relationship between the variables of "political stability and absence of violence/terrorism" and "government effectiveness." Several factors may contribute to this finding, including the fact that the studied countries are developing nations where government expenditures increase significantly with improved political stability through development programs. Moreover, except for Kuwait and the United Arab Emirates, the government's efficiency in most OPEC member countries is somewhat negative and exhibits low volatility, which may explain the lack of significant impact from changes in government effectiveness on seigniorage. As various studies have confirmed, improving good governance has positive effects on economic growth. With some caution, this research suggests that enhancing good governance leads to less inflationary financing and reduced government reliance on seigniorage. Therefore, establishing the necessary conditions for better governance in OPEC member countries can help curb inflation, which is one of the main consequences of the government's reliance on seigniorage. Establishing good governance based on appropriate economic, political, cultural, and social structures is feasible, but the decision and willingness of rulers to implement it undoubtedly remain among the most influential factors in this endeavor. The investigation of good governance and the seigniorage in Iran also demonstrates that Iran relies more on the average OPEC members for inflationary financing or using the seigniorage, and its governance indicators are lower than the selected countries' average. Therefore, based on the results obtained from the analysis of responce functions in empirical analysis, it is essential to pay attention to changing and improving the methods of governance and administration of the country. This way, monetary governance can be improved, and the government's use of the seigniorage can be limited

 The purpose of this article is to compare two methods of bilateral differences and individual variables to investigate the impact of macroeconomic variables on the exchange rate. The model used in the research is the monetary model with sticky prices (SPMM), which is used in order to improve the accuracy of the estimates from the Elastic Net. Research variables include exchange rate, gross domestic product (GDP), real interest rate (IR), consumer inflation (IN) and liquidity (M2) for two groups of developed and less developed countries. It has been estimated seasonally during the period from 1996 to 2022.

The model used in this article is the modified model of Biswas et al. (2022) and by using the SPMM model, the impact of macroeconomic variables on the exchange rate for developed and less developed countries is estimated in the form of bilateral difference methods and individual variables. In this regard, the model simulation analysis is explained first, and then the SPMM model is estimated and described using the variables of bilateral differences and individual variables.

The results of the research show that when the real model uses individual variables, the estimation of the model using the two-sided differences method increases the mean square error (MSE), and when the real model uses two-sided differences, the estimation of the model using the ndividual variables method produce higher MSE. In general, the findings of the research show that using individual variables to estimate the real model is more accurate, but the accuracy of the estimates may decrease in certain conditions. Therefore, it is important to consider various factors such as true model complexity, error term size, and sample size when choosing between individual variables and pairwise differences.

Other research findings show that model estimation using individual variables and elastic network leads to lower MSE than bilateral differences. In addition, the reduction of MSE among less developed countries are more than that of developed countries. Also, the impact of macroeconomic variables on the exchange rate is stronger in less developed countries than in developed countries

 Globalization in recent decades has brought developed and developing economies closer to each other through trade, technology transfer, capital flows, bonds, and employment opportunities, and the positive impact of globalization has been linked to the availability of economic advantages. Globalization has certain adverse effects that cause the release of pollutants, ecological imbalances, and issues related to global climate change. The effects of greenhouse gas emissions may adversely affect sustainable economic growth through welfare-reducing channels. Other adverse effects of globalization include environmental damage, price fluctuations, over-specialization, elimination of local industries, and social and industrial deterioration. Economists argue that globalization activities improve domestic economic structure by integrating trade, technology transfer, and financial activities. As a result, the growth of global economic activities may lead to more energy consumption and greenhouse gas emissions. Achieving sustainable environmental development along with preventing environmental degradation has always been a serious issue for policy makers. Globalization and diversification of exports are one of the most important factors affecting this issue.In this study, the impact of globalization variables and export diversification on the environment of 7 selected countries of the Persian Gulf is investigated. The focus of this study is on the combination of export diversification and globalization index (from the economic, political and social aspects), to investigate the performance of pollutants and as a result determine the EKC hypothesis in the Persian Gulf countries.

In order to conduct an empirical analysis of globalization, export diversity and environmental degradation, we use the panel data approach. The standard approach in spatial econometrics is that one should first start the analysis with a non-spatial model and then check whether the benchmark model needs to be developed by considering spatial interaction effects or not. The used sample includes 7 sections and the time period includes the years 1995 to 2020. The decision to select the sample is based on the availability of data from the World Bank. It will be used to estimate non-spatial fixed and random effects models. The fixed effects model controls for heterogeneity by allowing a separate interval for each cross section. While the random effects model shows the unobserved features of the country in the error term.

Export diversity has a positive and significant effect on carbon dioxide emissions, therefore creating diversification in exports in Persian Gulf countries will increase carbon dioxide emissions. The issue that has caused the high concentration of the export portfolio in these countries is the focus on the export of oil and gas and petrochemical products, which are inherently polluting industries. The findings also show that economic growth has a negative relationship with CO2 emissions. A one percent increase in economic growth reduces CO2 emissions by 1.67 percent based on the results of the Spatial Panel. The square effect of economic growth is also positive and significant, and this shows that the relationship between CO2 emissions and economic growth is U-shaped, such a U-shaped relationship basically shows that economic growth is not critical in reducing CO2 emissions in the countries in question. Considering that exports in the Persian Gulf countries are highly concentrated in the oil and gas and petrochemical sectors, and these sectors cause high pollution, therefore, the policy implications should be based on supporting the more efficient use of renewable energy in the economy of these countries. It should be noted that investment or tax incentives on technologies that consume renewable energy can be significant policy tools.

Sustainability of economic development requires environmental sustainability as part of a dynamic process. The results of this study showed that energy consumption and diversification of exports aggravates environmental degradation in Persian Gulf countries. The variety of export products significantly affects CO2 emissions in selected countries. In fact, export diversification can be useful not only for rapid economic growth but also for environmental pollution management. For example, companies should avoid producing goods that cause high CO2 emissions. This issue should be evaluated in expanding the export portfolio and products with high CO2 emissions can be imported. Of course, all these consequences require accurate knowledge of the scale of environmental pollutants in the economy of countries for each sector. Business and political efforts to diversify the portfolio of export products directly affect environmental quality. Countries can clarify information on capital flows related to investment companies to improve environmental regulations. Developing countries need to adopt efficient and effective environmental practices in activities related to foreign investment. To improve environmental quality from the perspective of energy policy, policymakers should focus on clean energy policies. Improving energy efficiency, investing in renewable resources, increasing the use of cleaner energy sources, and reducing energy intensity are the main options for reducing carbon emissions

 The international exchanges of business cycles influence the domestic economy through channels. Such exchanges can arise from global shocks (e.g., in oil prices), unobserved global factors (e.g. technological advancement or regional political development), or even national shocks in a particular country. To understand the impacts of such shocks on domestic economy, it is required to model the economy in the form of a global model. The global modeling of countries and the study of the relative importance of different movement sources of macroeconomic variables in the global economy to understand the impacts of global shocks on the domestic economy of Iran have been overlooked. However, a number of studies investigated shocks in oil prices by assuming interrelations of countries, no study has been conducted on the impacts of oil price shocks on the economy of Iran by assuming interrelations of Iran with its business partners. Although, a large number of studies have explored the impacts of oil price shocks , however, the impacts of the prices of other commodities on the economy in Iran or other countries have not been studied. Therefore, the aim is to investigate the effects of global changes on Iran's macroeconomic changes, including the real exchange rate, inflation, interest rate and real production.

The present work employed the seasonal data of Iran and its business partners, including China, India, Russia, EU (i.e. Austria, Finland, France, Germany, Italy, Spain, and the Netherlands), Turkey, and South Korea from 2001 to 2022. The variables were selected based on  model of Pesaran et al. (2004). The internal variables of the present study included the real production , inflation , short-term interest rate , and real currency exchange rate . The weight matrix was obtained by using the separate exports and imports of the countries for 2001-2022, calculating the external variables. The relative contributions of the countries to the economy of Iran were obtained using the channel of the business sector of the economy. The weight matrixes of the countries were calculated based on the GVAR model by using the ratio of the total of each country’s exports and imports from Iran to the total of Iran’s exports and imports to introduce the relative contributions of the countries to Iranian business into the model. The global variables of the present study included global commodity price shocks, including the logarithmic prices of oil, metals, and agricultural raw materials. The data were collected from the International Monetary Fund and the Central Bank of the Islamic Republic of Iran.

All three global prices have positive effects on the real currency exchange rate; however, the effects of oil prices are more significant, and those of basic metal prices are less significant. The positive shock effects of agricultural raw material prices on the currency exchange rate of Iran are not significant. Finally, the interest rate in Iran has positive and significant impulse responses to shocks in the prices of basic metals and agricultural raw materials and negative impulse responses to the price shocks of oil. That is, the government adopts an expansionary monetary policy (i.e. reducing the interest rate) in response to rising basic metal and agricultural raw material prices and a restrictive monetary policy (i.e. increasing the interest rate) in response to rises in the oil prices. 

Concerning the effects of increased global prices on the internal macroeconomic variables, it can be said that such price rises could increase the final cost of domestic products and raise inflation through the cost pressure channel if these commodities are seen as internal consuming items for production. This is reflected in the form of the positive impacts of global prices on internal inflation in the impulse response functions. However, these effects can be investigated from the demand perspective. Since Iran exports oil, basic metals, and agricultural raw materials, a rise in the global prices of these commodities raises the foreign revenues of Iran. As Iran has a relatively constant currency exchange structure, the foreign currency resources of Iran in the Central Bank rise, increasing liquidity and inflation. In such a case, the Central Bank reduces the currency exchange rate (i.e. the expansionary monetary policy) due to increased revenues of basic metal and agricultural raw material prices to support the domestic production of these commodities. This policy has increased the inflationary impacts of the prices of basic metals and agricultural raw materials within Iran. While oil revenues rise, the expansionary monetary policy is adopted to alleviate the initial inflationary effects. As a result, the initial positive effects of increased oil prices on inflation and domestic real production become insignificant. From this perspective, the Central Bank of the Islamic Republic of Iran does not adopt the same policy in response to increased revenues arising from increased global commodity prices. It can be said that the Central Bank of Iran adopts an inflation control policy for increased revenues of oil exports and an economic growth enhancement policy in response to the increased revenues of exporting basic metals and agricultural raw materials and increased real production in China. These policies can be explained by the relatively exogenous revenues of oil exports since oil revenues are not endogenous incomes arising from production structures in the economy. Moreover, since oil revenues are higher than other revenue sources, the inflationary effects of oil could be stronger. As a result, the Central Bank would have to adopt an inflation control policy. When global commodity prices and foreign currency revenues rise (which reduces the currency exchange rate in a floating exchange system) and induce inflation, the real exchange rate is expected to reduce. The results, however, revealed increased real exchange rate and, therefore, increased nominal currency exchange rate due to the Iran Parliament’s Managed Floating Currency Exchange Act of 2003. This act was in fact passed to avoid Dutch disease with the Iranian economy. According to the act, the currency exchange rate should be increased by the external-internal inflation difference every year. As a result, due to the inflationary effects of increased global prices and the policy structure of the Central Bank, increased foreign currency revenues and inflation weaken the Iranian currency and raise the real currency exchange rate

 Tehran province and its southeastern area (Varamin Plain) is a clear example of the dire situation in the country in terms of water scarcity. While the average rainfall in this area has always been declining in recent years, agricultural practice in this area is facing a difficult situation due to digging unauthorized wells, lack of clear water rights for the upstream dams, as well as transfering part of the wastewater from Tehran metropolis. In the past periods, the agricultural water of Varamin plain was supplied from atmospheric precipitation, water rights of upstream rivers and canals. Due to frequent droughts and other unnatural and human factors, these resources have been replaced by other sources of supply such as agricultural wells, water rights of upstream dams and Tehran urban sewage effluents. This form of water supply during planting and farming seasons, have created many problems for the farmers in Varamin Plain. In this article, while identifying these problems, impact assessment of the most important variables on Varamini farmers' preferences in using water resources extracted from irrigation canals are discussed by applying the discrete choice test method.

Considering the widespread use of the discrete choice test technique in extracting the preferences of goods and services for which there is no market, or the market is incomplete, in this research, in order to value and extract the willingness to pay for non-market variables (water quality, water release rights of dams and canals, the quality status of water canals and how to monitor the water flow) by considering the variable "water price" as the normalizing monetary variable, the discrete choice test technique has been used. To achieve this goal, four steps; Identification of variables and their levels, design of selection sets, distribution of questionnaires and data collection and finally implementation of statistical analysis have been done.

The signs of the estimated coefficients show that any reduction in agricultural water price, improved water quality, tightened water source monitoring, guaranteed water rights released from the dams and canals, improved and expanded water canals will increase the level of utility of Varamini farmers. In the context of farmers' willingness to pay (by including agricultural water price variable as a normalizing monetary variable), the research findings showed that the variable "water rights status released from dams and canals" is the most important one in the preferences of the respondents (farmers) who are willing to pay a higher price of 58% of water in exchange for guaranteeing the supply and receipt of water during the low rainfall seasons of the year. This shows the vulnerability of farmers and agricultural products cultivated in Varamin Plain in the face of water scarcity and drought crisis.

 By including the agricultural price water rate variable as a normalizing monetary variable), the findings of the research showed that "the status of water rights created by dams and canals" variable is the most important in the preferences of the respondents (farmers), as they are willing to spend the most for guaranteeing the supply and receipt of water in the low rainfall seasons of the year (paying 58% of the higher water price to guarantee water rights in the planting and harvesting seasons). On the other hand, "monitoring status of water mains" variable has the least importance in the preferences of the respondents (farmers) in such a way that they are willing to pay only 11% more for intensifying monitoring of water mains. On the other hand, the calculations related to the probability of choosing the levels of the variables showed: a) the probability of choosing the current price of water is equal to 55%. b) the probability of choosing higher quality water is 63%. c) the probability of choosing a centralized government supervision on the performance of waterworks is equal to 57%. d) The probability of trying to get enough water in the summer seasons (hot seasons) is equal to 81%. f) The probability of paying attention to the repair and expansion of the canals is equal to 60%. In addition to that, in the context of providing policy recommendations, it is suggested to pay serious attention to the issue of agricultural water in the Varamin Plain. Establishing a chemical treatment plant, and improving irrigation canals, are highly recommended since agricultural produce of this plain are considered as one of the main sources of food supply for Tehran metropolis. Otherwise, it can potentially cause detrimental damage to the health of Tehran citizens due to heavy metal penetration into agricultural produce in the long term. Any form of negligence will make the fertile lands of the region barren and uncultivable due to the accumulation of heavy metals in the soil

 A balanced government budget plays a decisive role in the stability of the macroeconomics, and the continuous budget deficit puts the stability of the economy at risk. A budget deficit transpires when the expansion in government expenditures exceeds the growth in government revenue. On the other hand, one of the reasons for the government debt enlargement is the continuous budget deficit. Permanent budget deficit has harmful effects on the economy. Therefore, economists recommend that the government should prevent excessive increase in debt by maintaining a sustainable fiscal policy. Fiscal policy is sustainable when the government reacts to the debt swelling by creating an adequate budget surplus. On the contrary, unsustainable fiscal policy causes crises such as suboptimal allocation of resources, failure in financial markets and high inflation rates. Iran's economy has always been struggling with the permanent budget deficit and high debt stocks. The major motive for this is the dependence of the Iranian government's revenues on the sale of crude oil and its products, because with the decrease in oil revenues, the government resorted to borrowing to compensate for its budget deficit, resulting in debt accretion. Therefore, it is necessary to understand the perspective of fiscal sustainability in Iran. The objective of this research is to assess Iran's government fiscal sustainability and its influential factors by employing annual data of Iran's economy from 1971 to 2022 and by utilizing constant parameter fiscal reaction functions including linear and non-linear models, time-varying parameter fiscal reaction function, Markov-switching fiscal regime change model and fiscal reaction function including control variables.

The existing literature about fiscal sustainability in Iran, has mainly examined fiscal sustainability in the framework of constant parameter linear fiscal reaction function. This research assesses different models of fiscal reaction function, such as constant parameter linear and non-linear models, time-varying parameter models and Markov-switching fiscal regime change models regarding Iran's fiscal sustainability. It also evaluates the dominant variables affecting Iran's fiscal sustainability.

In this research, firstly, the Iran's government fiscal sustainability is tested through the constant parameter linear and non-linear fiscal reaction functions, and to identify the variables affecting fiscal sustainability, the model including control variables is utilized. Then the Markov-switching fiscal regime change model and the time-varying parameter fiscal reaction function are estimated. Among the constant parameter linear and non-linear models, only the linear model including control variables has a significant debt-to-GDP ratio coefficient, which its sign is negative. Hence, it indicates that the fiscal policy implemented in Iran is unsustainable. The Markov-Switching fiscal regime change model shows the existence of two fiscal regimes, one unsustainable fiscal rgime where the reaction of the primary budget balance to public debt is significant and negative and one sustainable fiscal regime where the reaction of the primary budget balance to public debt is insignificant and positive. Also, the results show that the expected duration of the unsustainable fiscal regime is longer than the expected duration of the sustainable fiscal regime. The results of the time-varying parameter model show that the trend of the smoothed changes of the time-varying parameter is downward during the time, therefore, Iran's fiscal policy has proceeded in an unsustainable direction.

The results of the model including the control variables and the time-varying parameter model and the Markov-switching fiscal regime change model show that Iran's fiscal policy is unsustainable. Also, on the basis of this research findings, the variables of the output gap, the government revenue to GDP ratio and exchange rate fluctuation have a positive impact, and the variables of the government real cyclical expenditure and the old population ratio have a negative impact on the fiscal sustainability in Iran. Based on the results of this research, the government debt reduction has not been the priority of the governments in Iran. This has caused unsustainable fiscal policy which in turn, made the Iranian economy more and more vulnerable with regard to external shocks. While developing revenue sources and reducing dependence on oil revenues, the government should reduce its borrowing and therefore decrease the public debt and take steps towards sustainable fiscal policy to help achieving economic stability and sustainable growth in the long-term

 Economic complexity means a country's ability to produce and export more diverse products with less inclusiveness. Societies with efficient institutions internalize externalities and direct investment in productive activities lead to increased economic complexity. Democracy, by ensuring a stable political environment, stable economic framework, and social efficiency, promotes the accumulation of human capital, investment, and sustainable economic growth. One of the main contributions in this study is using multidimensional aspect of democracy (electoral democracy, liberal democracy, participatory democracy, consultative democracy, egalitarian democracy) to investigate the effect of democracy on economic complexity.

The purpose of this study is to investigate the effect of democracy on economic complexity. The data of 109 developing and developed countries during the period of 1995-2021 and a systemic generalized moments approach (SYS-GMM) have been used. The estimation also has also been done and the results compared separately for developing and developed countries.Research model based on studies (Njangang & Nvuh-Njoya, 2023) has been specified. In the present study, the 5 indicators of democracy by V-DEM database have been used including electoral democracy, liberal democracy, participatory democracy, consultative democracy, egalitarian democracy. This measure of democracy ranges from zero, which is poor quality to one which is considered to be the best quality democracy. Any increase from zero to one, indicates the improvement of democracy. The variables of economic growth, government size and population size were used as control variables in the model.  The two indicators of political rights and civil liberties used to check robustness. The data is extracted from the database of Freedom House and measured from 1 to 7 in which 1 indicates the highest degree of freedom and political rights and 7 indicates the lowest level. These two indicators used to show the stability of the estimated coefficients of the research model.  In order to check the robustness of the estimated coefficients, the results of the SYS-GMM estimator have been compared with the results of the two-stage generalized moments (GMM) and Feasible Generalized Least Squares (FGLS) estimators.

In this research, we investigate the effect of democracy on economic complexity using the systemic generalized moments approach (SYS-GMM). Democracy affects economic complexity through three paths of "innovation", "human capital" and "financial development" The results of this research show the positive and significant effect of all democracy indices on economic complexity. Moreover, the positive effect of economic growth, government size and population on economic complexity is confirmed. The stability of the estimated coefficients of the model as well as the consistency of the estimation results have been checked by the SYS-GMM estimator as a sensitivity analysis. Political rights and civil right variables were used to compare the results with democracy index. The results of the SYS-GMM estimator have also been compared with the results of the two-stage Generalized Method of Moments (GMM) and Feasible Generalized Least Squares (FGLS) estimators. The stability of the estimated coefficients has been observed in all methods.

The purpose of this study was to investigate the impact of democracy on economic complexity during the period of 1995-2021 using the systemic generalized moments approach (SYS-GMM) for 190 countries. For this purpose, from the 5 indicators of democracy (electoral democracy, liberal democracy, participatory democracy, consultative democracy, egalitarian democracy) V-DEM database was used. The research results show the effect of democracy on economic complexity can be heterogeneous compared to the initial level of economic complexity, so that democracy is associated with greater economic complexity in countries with higher economic complexity. The positive effect of democracy on economic complexity was confirmed in all models. Based on the results of the research, the coefficient of the types of democracy in developed countries is higher than the value of this coefficient in developing countries. In addition, economic growth, government size and population had a positive effect on economic complexity. To check the robustness of the model estimation we have estimated the model again using the Generalized Method of Moments (GMM) and Feasible Generalized Least Squares (FGLS). The two variables of political rights and civil rights were used instead of democracy and estimated with the Generalized Method of Moments (GMM) for all countries, as well as developing countries and developed countries. The coefficients and results have shown the stability of the estimated coefficients in all research models

 Inclusive growth strategy is a new concept in the field of growth and development in the economy, which is used by policymakers in a special way. In various political discourses, inclusive growth is a result of basic meanings such as large and fair growth, economic growth in alinmment with the development of human growth, pro-poor, accessible and participatory growth, sustainable growth from an economic and environmental perspective, and many private concepts. On the other hand, foreign direct investment (FDI) can be considered as a means of financing countries, which is one of the best tools for economic development. Considering its contribution and long-term implication, it is a narrow approach to lemmatize the role of FDI in promoting economic growth only. The new developments in growth literature take poverty and inequality also in the account. Hence, the paper links FDI with a broader term, Inclusive Growth. Inclusive growth is a growth process that includes every segment of society. It creates and distributes opportunities in an equitable manner and utilizes a major part of the labour force. It also moves them out of poverty and enhances productive employment. The evidence from a long list of literature, consulted for this research suggest that the resulted effect of FDI on inclusive growth is highly defined by the host economy’s own institutional quality.

In literature, inclusive growth is defined as the maximization of the social opportunity function. As it undertakes the spectrum of efficiency and equity under one umbrella. The concept of social opportunity function itself was derived from the idea of generalized concentration curve introduced initially by (Ali & Son, 2007) in inclusive growth literature. This concept of generalized concentration curve was later used to form social opportunity index by calculating the area under the curve (Anand, Mishra, and Peiris, 2013).Considering the fact that opportunity can take any forms such as health care, education or several other monetary and non-monetary opportunities. The study will use income as a determinant of opportunity. As it is the most common and widely used measure of determining individuals’ access to certain other kinds of opportunities.The aim of the present study is to analyze the effect of attracting foreign direct investment on inclusive growth in the Shanghai Cooperation members during the period of 2000-2022. Therefore, in order to calculate the inclusive growth index, to introduce the study model of this research and examine it the panel data method has been used. For estimating the model, threshold panel in Stata software has also been applied, to analyze the effect of foreign direct investment attraction on inclusive growth.

The results presented in this paper are fixed effect robust estimates, which automatically addresses any underlying existence of heteroscedasticity. Hausman specification test has been used to select between the two widely used panel estimation techniques, fixed and random effect estimation. Result for the overall sample of world economies shows a significant positive effect of FDI on inclusive growth and GDP. The estimation of the model was based on the fixed effects method in the stata software, and the results of the estimation of the model show that except for the exchange rate variable, the rest of the model variables have a significant effect on inclusive growth. The threshold limit for the foreign direct investment attraction variable is 4.875 billion dollars, based on which the Gini coefficient variable above and below this threshold limit will have different effects on inclusive growth. When the attraction of foreign direct investment is lower than this threshold, the Gini coefficient has a significant effect on the inclusive growth variable in the countries under study. In other words, with one unit increase in the Gini coefficient, it causes a decrease of 0.005 units in the inclusive growth index. This issue is in line with the view of dependency advocates.  The second key variable, institutional quality, has shown a significant effect on overall economic growth. The results show that a good and developed financial system may increase the available volume of financing investment. Supervision of investment projects that reduces the cost of obtaining information and increases productivity during projects and accelerates economic growth.

The purpose of the study was to investigate the proposition that, foreign direct investment can be used as a financing tool for growth inclusiveness. The study calculated and used the inclusive growth variable following the methodology of social welfare function which is also known as the social opportunity function.  The study reached to following conclusions: Foreign direct investment can be used as a financing tool for inclusive growth. A deep underpinning of its impact on inclusive growth variable suggested that the impact of FDI on increasing the overall income is positive and significant. Yet it does not significantly influence the distribution of the opportunities. Hence, FDI does not influence inclusive growth through equity channel but by increasing the average opportunities. The results of the research show that the Gini Coefficient Index, which is considered as a threshold change above and below the foreign investment attraction threshold, has a different effect on the overall growth index. When Foreign Direct Investment is less than the threshold, with a unit increase in the Gini Coefficient, leads to a worsening of the equitable distribution of income. As  a result the index of inclusive growth, is in line with the views of the dependency theory. If Foreign Direct Investment is above the threshold, with one unit increase in the Gini Coefficient, which leads to a worsening of the equitable distribution of income, the index of inclusive growth increases, will be in line with the theory of modernization

 Studies and contributions of structural vector autoexplanatory models using Bayesian and classical techniques have provided evidence that shocks to the marginal efficiency of investment are the main drivers of economic volatility in US postwar data. However, dynamic stochastic general equilibrium models attempt to explain the movement of consumption with production following a marginal efficiency of investment (MEI) shock. Indeed, the decline in consumption after a positive MEI shock contradicts empirically identified business cycles. This issue is referred to as the consumption puzzle. In other words, consumption usually decreases after a positive investment shock in the model. Therefore, the usual DSGE models do not produce the observed co-movement between macroeconomic variables in response to the marginal efficiency of investment shock. From an empirical perspective, consumption, investment, working hours and production all move together. This lack of coordination of consumption in response to investment shocks is problematic as an importantsource of business cycles.A review of empirical studies indicates that investment shocks and consumption puzzle have received limited attention. In this regard, the main aim and innovation of the current study is to set up a dynamic stochastic general equilibrium (DSGE) model and use the Bayesian approach for Iran in order to bridge this study gap as much as possible. The marginal efficiency of investment shock is a source of exogenous changes in the efficiency with which the final good can be converted into physical capital and thus into future capital input. This change may be due to technological factors specific to the production of investment goods. On the other hand, exogenous changes in efficiency can result from disturbances in the process of converting these investment goods into productive capital. In neoclassical models, after a positive MEI shock, households trading in financial markets increase their investment and reduce consumption. In fact, an intertemporal substitution effect occurs between the current consumption and investment, which creates a negative wealth effect and, therefore, creates the so-called consumption puzzle. The mechanism behind the puzzle was first described by Barrow and King (1984). The idea is that if an efficient equilibrium exists, the marginal rate of substitution between consumption and leisure should equal the marginal product of labor. This condition implies that with exogenous shocks that only indirectly affect marginal production labor, as MEI shocks actually do, consumption and labor hours move in opposite directions. Therefore, although MEI shocks account for up to 60% of the variance in output and working hours, the argument that investment shocks are one of the most important drivers of macroeconomic fluctuations is challenging.

The core of current research model is derived from the studies of Rohe (2012) and by expanding it, the marginal efficiency of investment shock and the consumption puzzle have been modeled for Iran. To estimate the model parameters, the Bayesian method, and the Random Walk Metropolis-Hastings algorithm were used. The data of the model’s observable variables include seasonal adjusted data, gross domestic production, private consumption, private investment, government expenditure, and inflation rate (gross) from 2004 to 2022, which underwent a de-trending procedure using the Hodrick-Prescott filter.

The marginal efficiency of investment shock leads to an increase in the rate of return on capital and investment. Consumption behavior is similar to investment behavior but with less volatility. Due to the increase in the demand side of the economy, inflation will increase and the real exchange rate will decrease. In response to the increase in the demand side, production, wage rates and employment increase. It should be noted that the contractionary monetary policy has led to a reduction in the fluctuations of macroeconomic variables, yet the dynamic of the variables has not changed.

 In justifying these results, the average mark-up equation of the economy can be used:Mup,t=MPNtWtPt  where, Mup,t  is the average mark-up, MPNt  is the marginal product of labor, Wt  is the nominal wage rate and Pt  is the price index in period t.The equilibrium conditions of the labor market can also be introduced as follows:1Mup,tMPNtNt=MRStCt , Nt  Despite nominal price stickiness, firms are not able to increase their prices in response to the increase in demand caused by the investment boom resulted from shocks. Therefore, the average mark-up of the economy decreases and effectively shifts the labor demand curve upwards. In this situation, consumption and working hours increase. In other words, in spite of inseparable preferences and in the conditions that the increase of working hours has a positive effect on the marginal utility of consumption (the complementarity of working hours and consumption), the co-movement of investment, production, working hours and consumption can be justified and the puzzle of consumption does not occur

The construction sector is one of the macroeconomic sectors that attracts a large amount of the country's liquidity every year. Investment in this sector is of paramount importance. Not taking into account the conditions of the investment field, possible events and influencing factors, actions and reactions of the market and society, when choosing construction projects, causes investors to have problems in reaching their goals. System dynamics is one of the most effective tools that provides the possibility to recognize and understand the laws governing the change processes of complex systems. Researches show that in Iran, especially in Tehran, the building and above all the housing as an economic commodity has characteristics that distinguish it from other commodities and complicate the analysis of supply and demand and market slow down. Therefore, the decision to invest in the construction sector can be considered a dynamic decision that various and different factors and variables are effective in this process. In this research, the dynamic simulation methodology of the system of investment in construction projects in Tehran has been analyzed and investigated which can be used as a support system for model-based decision.

In terms of purpose, this research is exploratory and can be considered among applied research. The statistical population of the research includes experts who work in the field of building investment. To collect information, the library method and documents of investment companies in the field of construction have been used. The basic analytical method in this research is simulation using system dynamics methodology. Vansim software was used to model system dynamics.

The increase in real housing prices over the past years has been compared with the output of the simulation model. The results showed that these two values behave similar to each other. The error value of the model in the predicted value and the actual value is very small on average, which indicates the high accuracy of the model in predicting the behavior of the reference. The results of the simulation in the case where the population variable is unchanged and the birth and death rates are zero showed that after some time, the real demand will be zero and the number of available houses will reach a constant value, and the limit behavior of the model is as expected. The simulation results showed that in the case where the land price variable is very high, after some time, the real demand will be zero and the number of available houses will reach a constant value, and the limit behavio of the model is as expected. Therefore, since there is no demand, no houses will be built as a result. Based on the results of the simulation, the most important effects on investment tendencies in construction projects are based on price and profitability variables. With an increase in price, investment in construction increases, but on the other hand, an increase in price will result into increased capital demand. By reducing the capital demand to 5%, the price will decrease to a small amount and the investment in the construction projects will be significantly reduced. The reason for not reducing the price properly is the current inflation, which affects the price of land and other influencing factors. Based on this, the inflation reduction scenario was investigated. With a 15% decrease in inflation, we have seen a relatively significant price decrease and the investment rate has decreased very little. Therefore, the most important component in investment tendencies is the inflation rate and economic stability, the appropriate inflation rate causes a balanced process of price increase and balanced demand, and for this reason, investment is made with less risk, demand and proper profitability.

In this research, various aspects of investment in construction projects have been studied with an analytical and multifaceted view. The simulation results showed that the price of building units and the price of land or old property will reach more than double the current value during the 5-year period of simulation. The annual real demand rate increases with a gentle slope from about 105 thousand cases to more than 117 thousand cases and then decreases to less than 84 thousand cases. The construction rate will be about 70 thousand units per year by the investors, and 116 thousand units per year will be invested during the 5-year period, which is due to the increase in capital demand. Based on this and taking into consideration the units demolished for renovation and some units removed from the service due to the exhaustion of the effector in demand and available within 5 years, in the end more than 400 thousand residential units will be added to the total construction units of the city. Based on the results and reports extracted from the simulation model, which shows the future conditions of the investment field of construction projects, along with the study of the performed scenarios, the decision makers can observe and check other changes in the system in case of changes in the variables. Eventually, fully informed decisions are recommended to be made based on investigations with a systemic approach