Iranian Economic Review
Volume:10 Issue: 12, Winter 2005

This paper has examined the phenomenon of convergence of per capita out put levels across the IC countries for the 1960-1998 periods. Three concepts of convergence, i.e., sigma beta and relative beta, have been used. The estimated beta values reveals only a very weak convergence (λ=.0014) across IC for 1960-1998 period. But when a more homogeneous group of countries were selected, the results somehow improved the estimated beta value. For PEC s β was.005. The sigma values reveal that the per capita out-put decreases across IC had an increasing trend over the 1950-1998 periods. It means that the poorer members did not demonstrate strong output convergence for the full or part of the period. For SAARC the output variation revealed a diminishing trend, but for the OPECcountries it showed an increasing trend. The results of relative convergence (toward the countries steady state position) reveal that only for 15 countries the convergence hypothesis is confirmed. The average speed of convergence was. 33. The results provide a weak evidence of convergence across the IC, it means more attempt in various fields of cooperation: political, economic, cultural, social and scientific, is required to meet the OIC goals.

Innovation ability plays an important role in economic growth not only in under- developed countries, but also in advanced countries, especially when markets are in recession. In this paper, we analyzed changes in major developments in the context of innovation capacity and the causality relation between innovation and its sources through an empirical study based on the automotive subcontractor network, which has experienced a number of architectural innovations. We showed that most of innovation sources (information sharing, organizational size, investment in R&D, and knowledge volume) are the accelerators or "effects" rather than the stimulators or "causes" of innovation.

This paper empirically investigates the welfare cost of inflation in a money in utility function (MIUF) model. In order to do this, as in modern monetary theory, dynamic optimizing framework of a representative agent is used. This optimization process yields a system of stochastic nonlinear Euler equations that show the agent’s choices. The empirical analysis employs the generalized method of moments (GMM) technique to estimate the parameters of the system by using annual data for Iran, 1970- 2000. The structural parameters recovered from the estimation of the Euler equations of themodel are statistically significant and economically meaningful. The results of this study confirm that the representative agent model fits the consumption and money data well. We find for low rate of inflation welfare cost markedly increases with increase in inflation but rapidly reaches an asymptote, that is the welfare cost of high inflation is 7 percent of GDP. The results show that the welfare loss due to an increase in the inflation from zero to 10 percent is equivalent to a decrease in real GDP over than 2 percent, more than twice as big as Lucas’ (2000) estimate for U. S. In this study, the implication of model about seigniorage is investigated too; our empirical finding in this regard indicates the stability of seigniorage to GDP ratio despite of wide fluctuation in the rate of inflation.

In recent decades, economic growth and its determinants have been important issues in economics. Economists have made attempts to analyze economic relations of countries and to seek ways leading a higher rate of growth. Therefore, various models are drawn in this regard. Recent theoretical growth models have relied on the importance of externalities. Today, it is found out a new round in global economy in which the economy of different nations have been closed and linked to each other. In new conditions of global economy, joint activities and signing agreements between countries could generate opportunities for them, and their economies converge. When a country raises its investment and improves technology, it spreads out of its borders. Hence, the subject of spillovers is discussed. In the literature, there is particular emphasis on the role of contiguity, trade and economic co-operations in transferring capital and technology resulting in a higher rate of economic growth. Less developed and developing countries can benefit from spillover effects knowledge and technology of developed countries, and they can go through development way more quickly –like Newly Industrialized Asian Countries. It is clear that benefiting from these externalities is influenced by domestic situation and capacity of each economy. The objective of this study is to analyze convergence and spillover effects between EU and countries on the Southern side of the Mediterranean.

This paper contains the main results concerning the evaluation of the consumption distribution of Iran in terms of levels, shape, inequality and social welfare for the years 1989 and 1994. The results show that the shape of consumption distribution in Iran is showed to the right and there is a large gap between the average level of consumption in rural and urban areas. Inequality in Iran is relatively high and there were no significant changes in inequality in the whole country during the Islamic Republic’s first five-year plan (1989-1994). This estimates for the whole country masks a decrease in quality of urban area and an increase in rural areas.

In this paper the factors having influence on travel demand to Iran are paper explored. The hypothesis of the research specifies the variable of “domestic upheavals and insecurity” as the most significant obstacle to expansion of the demand for travel to Iran. To test the above hypothesis, first several demand models that have been proposed to study demand for tourism in different countries, are briefly reviewed, and then in a macro model the function of demand for travel to Iran is estimated using econometrics methods. The substantial finding is that, at the present time, the low demand for travel to Iran is not due to insufficient infrastructures and facilities, in regard to accommodations and transportation, but it is the element of “insecurity” that is the most significant hindrance to the demand growth for travel to Iran. Hence, to increase the travel demand to Iran and eliminate the present impediments, alongside economic solutions, it is necessary to elevate the security related obstacles.