Iranian Economic Review
Volume:14 Issue: 24, Summer 2009

This paper analyzes the design of macroeconomic policies for Iran during the fourth development plan (2005-2009). For this purpose, first we develop and design a macroeconometric model for Iran economy. Then, we use the stochastic optimal control algorithm “OPTCON” until determine optimal fiscal and monetary policies as solutions of optimum control problems with a quadratic objective function and the macroeconometric model as a constraint. The results show that, the optimal values of government current expenditures, government capital expenditures, tax revenues and oil revenues as the set of fiscal policies, are greater than those proposed in fourth development plan where as money stock as monetary policy is less than the proposed one. The comparison between the effects of the proposed and optimal macroeconomic policies on goal variables, show that using the optimal policies, will improve the economic growth rate significantly and led to lower inflation and unemployment rate. Also, these optimal policies decrease the ratio of budget deficit to GDP some deal. Therefore, the determination of optimal macroeconomic policies for fifth development plan and remainder of the Iran’s twenty years of development prospect bill is suggested.

This paper intends to respond to the questions that: “What are the impacts of government subsidies to printed press, directly and indirectly, on their circulations or on the demand for them?” Furthermore, does the printed press need these subsidies?In order to answer the above questions, the amount of the subsidies paid to all the papers, and also, the combined revenues and expenditures for 9 daily papers with the widest circulations have been studied and the results show the subsidies being paid have neither economic justifications, by economic tools, nor are being paid in proportion to the average expenditures. Therefore, they wouldn’t have a significant effect on the demands for purchase the papers.

The main object in this is to evaluate the possibility of any changes might have happened due to the crises in Tehran Stock Market, concerning the relationship between stock return and the volatility. We have estimated the relationship between Tehran stock market returns and conditional volatility concerning pre and post crises data and for the whole period. Using parametric–GARCH-in mean model has shown positive and significant relationship from 1997 to 2007. But this relationship have been affected by crisis. There is negative (significant) relationship before crisis and positive (but not significant) after crisis.

The neoclassical growth model predicts convergence of productivity or per capita output levels across regions. We investigate this hypothesis for the Iranian economy using data on demand deposits as a proxy for GDP. Moreover, the analysis investigates the effects of rent-seeking on the convergence process. In contrast to previous papers, the analysis shows robust evidence in favour of both sigma and beta convergence across the Iranian provinces and provide some indications on the adverse effect of rent-seeking on regional convergence.

The main purpose of this paper is to examine the impact of exchange rate unification policies on the domestic price in Iran using a co-integration approach between 1971and 2002.For doing this, a weighted average of exchange rate under the multiple exchange rate regimes is used as a proxy for the unified exchange rate. The impact of this unified exchange rate on the domestic price alongside with other variables is evaluated by multivariate Johansen’s co-integration technique.The main finding indicates that the unified exchange rate has a positive effect on the domestic price in Iran. In other words, the move from multiple exchange rate system to unified exchange rate maybe accompanied with inflationary pressure.

Payment systems play a major part in the conduct of a country's monetary policy, financial sector and economic development. The use of technology in mature payment systems has also gained great importance. Electronic banking, mobile phones, smart cards and related technologies has introduced the new instruments for payment. So payment could be in different forms, from the most initial ways to the most advanced electronic one.In this paper, we have studied the economic effects of a new technology of payments in banking industry by using Iranian bank level panel data.Electronic payment in banking industry leads to decrease average costs, increase the economic of scale in the attraction deposits more than in the giving loans and finally will affect input demand asymmetric. By using this new technology, the ratio of labour and both materials and physical capital have been decreased.

The main objective of the present study is to find out healthcare disparities in different states of Iran with reference to the relevant public health indicators and also extract those principal factors which are responsible for unequal distribution of healthcare facilities in Iran. Factor analysis is applied as a structure detection method with the goal of discovering that how many different factors are needed to explain the pattern of relationships among the variables including both component analysis and common factor analysis. The analysis presented in the study concludes that four components i.e. Child Mortality rate, number of Rural Public Health Centers, number of Rehabilitation Centers and number of paramedics, could describe nearly about 76 percent of total variance explained for regional disparities and thereby any considerable policy action implemented by the government effectively changes the environment of health and health care facilities distribution among the states specially deprived regions in Iran.

ow many scholars debate the different impacts of globalization on the economic behaviors of all nations, that globalization reduces or increases poverty, raises or drops wages and labor standards in societies and so on. Accordingly, we make in particular a question whether globalization affects income inequality in countries worldwide. The objective of this paper is thus to evaluate the effect of globalization on inequality among nations. We specify a panel income distribution regression model using cross-sectional data of the selected countries (including Iran) and relevant time series over 1985-2004. Several specified for globalization have significant and different effects on income distribution of countries with different levels of income. In our augmented model specification, we also evaluate an interacted effect of a block implementation (e.g. emerging market economies, high income, middle income and low income countries) with globalization on inequality. The results confirm this effect significantly on income inequality.