Iranian Economic Review
Volume:12 Issue: 18, Winter 2007

It has been suggested that existing estimates of the long-run impact of a surprise move in income may have a substantial upward bias due to the presence of a trend break in 1970s (1350s) and 1980s (1360s) gross domestic product (contained oil) data of Iran. This article shows that the statistical evidence does not warrant abandoning the no-trend-break null hypothesis at the 5% significance level. A key part of the argument is that conventionally computed p values overstate the likelihood of the trend-break alternative hypothesis. This is because they do not take into account that, in practice, the data is chosen based on pretest examination of the data.

This study estimates three hypotheses of OPEC behavior: market-sharing, target revenue and competitive model for the period 1980 to 2000 for all OPEC courtiers except Iraq. To examine co-integration relation for oil production, we use ADF test in OLS estimation. Also we use ARDL approach to examine these hypotheses and the long run relationship of them. Results indicate none of three hypotheses fit completely with OPEC behavior; Market sharing model is consistent with most of OPEC countries, but not for all; Saudi Arabia is consistent with market sharing and price maker. Some of estimations of Target revenue and Competitive models are spurious, but among countries, which have statistically significant estimations, none of them is consistent with competitive model. All estimations of Target revenue model with OLS to all OPEC countries are spurious except one (behavior of Iran is consistent with partial target revenue) and also the long run relationship of all estimations of Target revenue model with ARDL to all OPEC countries are meaningless except one (behavior of Qatar isn’t consistent with target revenue model).

This paper examines the causal relationship between stock prices and macroeconomic aggregates in Iran, by applying the techniques of the long–run Granger non–causality testproposed by Toda and Yamamoto (1995). We test the causal relationships between the TEPIX Index and the three macroeconomic variables: money supply, value of tradebalance, and industrial production using quarterly data for the period 1372:1 to 1383:4. The results show unidirectional long run causality from macroeconomic variables to stock market. Accordingly, the stock prices are not a leading indicator for economic variables, which is inconsistent with the previous findings that the stock market rationally signals changes in real activities. Contrarily, the macro variables seem to lead stock prices. So, Tehran Stock Exchange (TSE) is not informationally efficient.

Economic Cooperation Organization (ECO), based on regional and multicultural cooperation, has focused on the improvement of living standards, collective as well asindividual prosperity of people and economic development of member’s states. Since February 1992 ECO has been expanded to ten as the result of collapse of the Soviet Union. Of course, gas and oil are very important factors in this regard. ECO hasfollowed its two major plans in the context of “Action Plan” and «Istanbul Declaration». Each of these documents is an indication of overall goals of this organization by 2005. One of the most important goals of ECO members has been accelerated of economic growth and development. The main question of this paper is: “Has ECO been able to fulfill declared goals among member states?” The hypothesis of this paper is: ECO hasfailed to achieve these goals. Prove of this hypothesis makes the revision of ECO activities a necessary step

Domestic tourism has an important role in socio-economic development in several ways including creating jobs and improving income distribution. Although several researcheshave been done on tourism demand, a small proportion of them have been on domestic tourism. In this paper, the price and expenditure elasticities of the household demand for domestic tourism in Iran, focusing on the case of Hamedan Province, are estimated by the Almost Ideal Demand System (AIDS) model. The data set used is of a cross-section type and has been collected from Hamedan tourists regarding their domestic trips.This data set includes 504 domestic tourist households that their trips last at least one overnight in Hamedan province in summer of 2003. The expenditure elasticity results for food, accommodation, transportation, visit fees (entrance fees to enter the points of interest), and souvenirs commodity groups are estimated by about 1.34, 1.32, 1.47, 0.36 and 0.47, respectively, and for total trip to provinces were close to one. The price elasticities of demand for the five commodity groups and for total trips to provinces are less than one. This implies that an increase in the total budget of the household yearly trips would be allocated by a smaller proportion to Hamedan trip as compared to other provinces. Another implication is that an increase in the price of visit fees, for example, can increase the total receipts to compensate the high costs of repair and maintenance of the valuable points of interest

Modeling and analysis of future prices has been hot topic for economic analysts in recent years. Traditionally, the complex movements in the prices are usually taken as randomor stochastic process. However, they may be produced by a deterministic nonlinear process. Accuracy and efficiency of economic models in the short period forecasting is strategic and crucial for business world. Nonlinear models are efficient enough and suitable for short time forecasting. So notable attempts is devoted on understanding different economic time series’ and nonlinear dynamical models that can fit them.In this paper, it is tried to investigate Tehran stock exchange index time series. It is assumed. So, the Correlation Dimension (CD), the Hurst Exponent, and the Largest Lyapunov Exponent (LLE) of the time series are calculated. It is shown that the timeseries corresponding to Tehran stock Exchange index is nonlinear. The analyses of the results show enough evidence to accept the conjecture of existence chaotic behavior in Tehran stock exchange index.

It is now evident in the literature that the information and communication technology (ICT) has a positive and significant impact on the productivity and economic growth. Most studies in this area, however, are limited to the developed countries.Given different regulations and economic conditions, and also an increasing trend in allocating resources to ICT in developing countries, it is important to examine the impact of ICT spending in developing countries on the productivity and growth.In this study, we search for an empirical relationship between ICT spending and labor productivity across the Iranian manufacturing industries. We use the survey data on the fourdigit large manufacturing industries for the period 2000-2001. In order to control for the heterogeneity among different industry groups, we use the multilevel model. Our results show that the net effect of the ICT on the labor productivity is positive and significant, but not as high as what has been found in the developed countries.

The objective of this study is to model and estimate the effect of financial services in the agricultural sector of Iran on the value added of this sector. Moreover, since as of 1984, the Interest Free Banking law was implemented, the effect of this change on the value added of the sector will be studied as the second objective. The model of the study consists of three tions. The volume of real investment in the first tion. is assumed to bethe function of value added, flow of finance, and last year’s capital stock. The second tion consists of a capital accumulation identity, and the third tion formulates value added as function of capital stock and labor force in the agricultural sector. The three tions are estimated simultaneously with co integration method and both long run and short run estimation of coefficients exhibit a positive and significant effect of credit on both the capital stock and output. Further, the results show application of Islamic tools of finance also contribute to the increase of agricultural sector’s value added significantly.These results reinforce the arguments of Islamic economists that Islamic finance is growth promoting.

A key issue for many countries and even for international organizations including «The World Bank» and «The United Nations» is how to attack poverty. In many countries of theworld, millions of people are hungry, lacking shelter and clothing, sick and uncared for, illiterate and not schooled. These, all cause to reduce efficiency and productivity of labor, and hence decrease income. Also, being in a geographical region in which there are poor countries is itself a factor of poverty. In fact, there is a poverty trap in such regions. That is, being poor and being in a poor region are factors which lead to longer and deeper poverty. Many Muslim and Arab countries are classified as low income countries and they are also contiguous to other low income ones. Studying poverty in these countries is necessary and can be helpful for deciding about both domestic and common regional polices for them. Therefore, this study focuses on poverty in Arab and Muslim nations, and analyzes this subject through spatial econometric techniques, because spatial econometrics is a suitable method for considering spatial and geographical effects. Countries under study are clustered in accordance of both income poverty indices.

The use of the Internet has increased in recent years remarkably. Companies employ the World Wide Web (WWW) to gather, disseminate and interchange information with actualand potential customers, and then Internet Technology seems to be served and applied as a strategic tool and affects strategies and practices of a firm such as Porter''s competitive strategies. Many research findings confirm and support being of positiveeffects of Internet on an enterprise''s competitive advantage. In this paper, we will illustrate that enterprises can acquire relational and informational competency through Internet technology, and based on these competencies they can succeed in competitive cyber markets. According to the Internet competencies, Internet marketing strategies can be divided into five categories: Transactional, Profile, Customer-oriented,Relationship, and Knowledge strategies. Choosing and implementing any category of strategies depends on the degree of internet competencies (informational and relational) that a firm has. When both are high, proper internet marketing strategy seems to be knowledge strategies; and when both are low, transactional internet marketing strategies would be the suitable category.

Several procedures have been employed to examine the impacts of subsidies on different indices in an economy. This paper proposes a new approach enabling one to compare direct and indirect payments on households. To this end, the impact of government payments is examined on Gross Regional Products, Employment, Income Distribution and Inflation of Golestan Province in Iran through a Social Accounting Matrix for the year1993-94. The advantage of this approach is its ability to compare the impact of direct payments and indirect one on the above indices in more detail. The results indicate that direct payments lead to inflation with more influence on comparison with indirect payments.