Iran’s Inflationary Experience: Demand Pressures, External Shocks, and Supply Constraints

2017 ◽  
Vol 13 (2) ◽  
Author(s):  
Magda Kandil ◽  
Ida A. Mirzaie
Keyword(s):  
Iraq War ◽  
Binding Capacity ◽  
Output Growth ◽  
Policy Implications ◽  
External Shocks ◽  
Public And Private ◽  
Long Run ◽  
Oil Resources ◽  
Short Run ◽  
The Cost

AbstractThis paper studies determinants of inflation in Iran. The buildup of international reserves has accelerated during the episode of higher oil price. The associated increase in government spending has limited contribution to capacity building and pronounced inflationary pressures, which accelerated at the beginning of the Iran-Iraq war in 1980, and eased at the end of the war in 1988. Accommodating monetary stance has proven to be an important determinant of inflation, both in the long and in the short-runs. In the long-run, depreciation of the rial increases the cost of intermediate goods, increasing inflationary pressures with limited significant effect on output. In contrast, depreciation could boost competitiveness of non-energy exports, in support of higher demand and output growth in the short-run. For policy implications, priorities going forward should be in place to direct both public and private resources toward relaxing binding capacity constraints, capitalizing on oil resources in Iran and the prospects of the positive implications of lifting sanctions in the context of the recent nuclear agreement between Iran and the G5+1 countries.

scholarly journals Application of the theory of decision making under risk and uncertainty at modelling of costs

2010 ◽  
Vol 56 (No. 5) ◽  
pp. 201-208 ◽  
Author(s):  
M. Beranová ◽  
D. Martinovičová
Keyword(s):  
Decision Making ◽  
Financial Accounting ◽  
Cost Functions ◽  
Risk And Uncertainty ◽  
Managerial Decision ◽  
Managerial Decision Making ◽  
Bayesian Theorem ◽  
Long Run ◽  
Short Run ◽  
The Cost

The costs functions are mentioned mostly in the relation to the Break-even Analysis where they are presented in the linear form. But there exist several different types and forms of cost functions. Fist of all, it is necessary to distinguish between the short-run and long-run cost function that are both very important tools of the managerial decision making even if each one is used on a different level of management. Also several methods of estimation of the cost function's parameters are elaborated in the literature. But all these methods are based on the past data taken from the financial accounting while the financial accounting is not able to separate the fixed and variable costs and it is also strongly adjusted to taxation in the many companies. As a tool of the managerial decision making support, the cost functions should provide a vision to the future where many factors of risk and uncertainty influence economic results. Consequently, these random factors should be considered in the construction of cost functions, especially in the long-run. In order to quantify the influences of these risks and uncertainties, the authors submit the application of the Bayesian Theorem.

Fish Exports and Economic Growth: The Pakistan’s Experience

2019 ◽  
Vol 20 (2) ◽  
pp. 279-296 ◽  
Author(s):  
Syed Tehseen Jawaid ◽  
Mohammad Haris Siddiqui ◽  
Zeeshan Atiq ◽  
Usman Azhar
Keyword(s):  
Economic Growth ◽  
Time Series Data ◽  
Positive Impact ◽  
Impulse Response Function ◽  
Policy Implications ◽  
Sensitivity Analyses ◽  
Series Data ◽  
Distributed Lag ◽  
Long Run ◽  
Short Run

This study attempts to explore first time ever the relationship between fish exports and economic growth of Pakistan by employing annual time series data for the period 1974–2013. Autoregressive distributed lag and Johansen and Juselius cointegration results confirm the existence of a positive long-run relationship among the variables. Further, the error correction model reveals that no immediate or short-run relationship exists between fish exports and economic growth. Different sensitivity analyses indicate that initial results are robust. Rolling window analysis has been applied to identify the yearly behaviour of fish exports, and it remains negative from 1979 to 1982, 1984 to 1988, 1993 to 1999, 2004 and from 2010 to 2013, and it shows positive impact from 1989 to 1992, 2000 to 2003 and from 2005 to 2009. Furthermore, the variance decomposition method and impulse response function suggest the bidirectional causal relationship between fish exports and economic growth. The findings are beneficial for policymakers in the area of export planning. This study also provides some policy implications in the final section.

A Dynamic Analysis of Child Labor with a Variable Rate of Discount: Some Policy Implications

2006 ◽  
Vol 5 (1) ◽  
Author(s):  
Satya P Das ◽  
Rajat Deb
Keyword(s):  
Discount Rate ◽  
Child Labor ◽  
Time Preference ◽  
Infinite Horizon ◽  
Policy Implications ◽  
Poverty Trap ◽  
Variable Rate ◽  
Lump Sum ◽  
Long Run ◽  
Short Run

AbstractThis paper analyzes the problem of child labor in an infinite-horizon dynamic model with a variable rate of time preference and credit constraints. The variability in the rate of time preference leads to the possibility of multiple steady states and a poverty trap. The paper considers the long-run and short-run effects of an array of policies like enrollment subsidy, improvement in primary education infrastructure, lump-sum subsidy, and variations in loan market parameters. We distinguish between policies that reduce child labor in the long run only in the presence of a variable discount rate and other policies which work whether or not the discount rate is variable. Credit-related policies belong to the former group. Policies that reduce child labor and increase family consumption in the long run may have an adverse effect of lowering consumption in the short run.

scholarly journals ESTIMATING PROFIT , COST FUNCTION AND TECHNICAL EFFICIENCIES OF RICE PRODUCTION IN NEJAF FOR SEASON 2016*

2019 ◽  
Vol 50 (5) ◽  
Author(s):  
Al-Mashhdani & Mahmood
Keyword(s):  
Cost Function ◽  
Output Level ◽  
Average Output ◽  
Optimal Output ◽  
Long Run ◽  
Actual Output ◽  
Short Run ◽  
Profit Maximizing ◽  
Economic Price ◽  
The Cost

The aim of this study was to estimate the profit and cost functions as well as economic, price, cost, and technical efficiencies beside the other economic indices at actual, optimal and profit-maximizing output of rice. A random sample of 240 rice  farms in Nejaf province was used during the agricultural season 2016. From efficiency scales of profit function, it was shown that the output quantity had the greatest impact on the profit compared to other variables (average output costs and price). According to the cost function, the optimum output level and the profit- maximizing output  level for the short run were 64.84 tons and 117.4 tons respectively. The lowest price that the farmer can accept was 194.83 thousand dinars / ton. At this price, the producer loss all fixed costs in the short run, hoping that the price of rice will improve in the long run. Net profit was estimated on the basis of actual output, cost minimizing output (optimal) and profit-maximizing output, which amounted to 8084.32, 30852.65 and 45547.5 thousand dinars, respectively. The of technical efficiency were 34%. and the cost efficiency was 0.52. We conclude from the study that economic resources have not been exploited optimally, indicating that actual output is far from optimal output. The study recommends a output policy aimed at increasing economic efficiency and optimizing the use of available resources.

scholarly journals Do FDI and Public Investment Crowd in/out Domestic Private Investment in the SADC Region

2021 ◽  
Vol 19 (1) ◽  
pp. 3-25
Author(s):  
Eslon Ngeendepi ◽  
Andrew Phiri
Keyword(s):  
Capital Expenditure ◽  
Public Investment ◽  
Trade Openness ◽  
Government Expenditure ◽  
Private Investment ◽  
Policy Implications ◽  
Domestic Investment ◽  
Government Investment ◽  
Long Run ◽  
Short Run

Our study examines the crowding-in/out effect of foreign direct investment and government expenditure on private domestic investment for 15 members of the Southern African Development Community (SADC) for the period 1991–2019. The study employed the panel Pool Mean Group (PMG)/ARDL technique in estimating the short-run and long-run cointegration relationships between FDI, government capital expenditure and domestic private investment and adds three more variables for control purposes (interest rate, GDP growth rate and trade openness). For the full sample, FDI crowds-in domestic investment whilst government crowds-out domestic investment. However, in performing a sensitivity analysis, in which the sample was segregated into low and high income economies, both FDI and government investment crowd-in domestic investment whilst government expenditure crowds-out domestic investment in lower income SADC countries with no effect of FDI on domestic investment. Policy implications are discussed.

COVID-19 pandemic and connectedness across financial markets

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Abubakr Naeem ◽  
Saba Sehrish ◽  
Mabel D. Costa
Keyword(s):  
Financial Markets ◽  
Financial Risk ◽  
Negative Impact ◽  
Spillover Effect ◽  
External Shocks ◽  
Content Type ◽  
Time Frequency ◽  
Long Run ◽  
Short Run ◽  
Momentum Trading

Purpose This study aims to estimate the time–frequency connectedness among global financial markets. It draws a comparison between the full sample and the sample during the COVID-19 pandemic. Design/methodology/approach The study uses the connectedness framework of Diebold and Yilmaz (2012) and Barunik and Krehlik (2018), both of which consider time and frequency connectedness and show that spillover is specific to not only the time domain but also the frequency (short- and long-run) domain. The analysis also includes pairwise connectedness by making use of network analysis. Daily data on the MSCI World Index, Barclays Bloomberg Global Treasury Index, Oil future, Gold future, Dow Jones World Islamic Index and Bitcoin have been used over the period from May 01, 2013 to July 31, 2020. Findings This study finds that cryptocurrency, bond and gold are hedges against both conventional stocks and Islamic stocks on average; however, these are not “safe havens” during an economic crisis, i.e. COVID-19. External shocks, such as COVID-19, strengthen the return connectedness among all six financial markets. Research limitations/implications For investors, the study provides important insights that during external shocks such as COVID-19, there is a spillover effect, and investors are unable to hedge risk between conventional stocks and Islamic stocks. These so-called safe haven investment alternatives suffer from the similar negative impact of systemic financial risk. However, during an external shock such as COVID-19, cryptocurrencies, bonds and gold can be used to hedge risk against conventional stocks, Islamic stocks and oil. Moreover, the findings imply that by engaging in momentum trading, active investors can gain short-run benefits before the market processes any new information. Originality/value The study contributes to the emergent literature investigating the connectedness among financial markets during the COVID-19 pandemic. It provides evidence that the return connectedness among six global financial markets, namely, conventional stocks, Islamic stocks, bond, oil, gold and cryptocurrency, is extremely strong. From a methodological standpoint, this study finds that COVID-19 pandemic shock has a significant short-run impact on the connectedness among financial markets.

Public and Private Investment and Economic Growth: An Empirical Investigation

2018 ◽  
Vol 63 (2) ◽  
pp. 87-106 ◽  
Author(s):  
Garikai Makuyana ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
Positive Impact ◽  
Public Investment ◽  
Private Investment ◽  
Current Debate ◽  
Annual Data ◽  
Public And Private ◽  
Long Run ◽  
Short Run ◽  
Crowd Out

Abstract This paper provides new evidence to contribute to the current debate on the relative impact of public and private investment on economic growth and the crowding effect between the two components of investment in South Africa. Using annual data from 1970 to 2017, the study applies the recently developed Autoregressive Distributed Lag (ARDL)-bounds testing approach to cointegration. The study finds that private investment has a positive impact on economic growth both in the long run and short run, while public investment has a negative effect on economic growth in the long run. Further, in the long run, gross public investment is found to crowd out private investment, while its infrastructural component is found to crowd in private investment. The results of the study also reveal that both gross public investment and non-infrastructural public investment crowd out private investment in the short run. Overall, the study finds private investment to be more important than public investment in the South African economic growth process and that the importance of infrastructural public investment in stimulating private investment in the long run cannot be over-emphasized.

The force of globalization reshaping the local institutions: evidence from the Organization of Islamic Cooperation member countries

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nahla Samargandi ◽  
Kazi Sohag ◽  
Ali Kutan ◽  
Maha Alandejani
Keyword(s):  
Government Expenditure ◽  
Policy Implications ◽  
Institutional Setting ◽  
Cross Sectional ◽  
Policy Makers ◽  
Content Type ◽  
Long Run ◽  
Short Run ◽  
Nonlinear Relation ◽  
Political Globalization

PurposeThe authors reinforce the existing literature on the effect of overall globalization on institutional quality (IQ), while incorporating the effects of economic, political and social aspects of globalization, human capital, government expenditure and population growth. To this end, the authors estimate panel data models for a sample of 36 member countries of the Organization of Islamic Cooperation (OIC) during 1984–2016.Design/methodology/approachThe authors employ the cross-sectional autoregressive distributed lags (CS-ARDL) approach.FindingsThe study’s investigation affirms the presence of an inverted U-shaped (nonlinear) relation between overall globalization and IQ indexes for the sample countries, which suggests no additional room for improvement in IQ. It also underpins the existence of an inverted-U-shaped (nonlinear) relation between political globalization and IQ. In contrast, economic and social globalizations have a U-shaped relation with IQ, implying more scope for improvement.Research limitations/implicationsThe findings have key policy implications. First, policy makers should consider a long-run approach for improving IQ and globalization over time. Second, quick reforms in the short run may not improve IQ.Practical implicationsThe results suggest that policy makers should approach the globalization process from a long-run perspective as well by designing appropriate strategies to provide a continuous but gradual increase in globalization so as to systematically monitor the threshold limits to IQ from improving globalizationOriginality/valueTo the best of the authors’ knowledge, this work is the first to empirically investigate the overall role of globalization in promoting IQ under the conditions of short-run heterogeneity and long-run homogeneity. The authors focus on the member countries of the OIC, many of which are ruled by authoritarian regimes and suffer from a poor domestic institutional setting.

Does public investment crowd-out private investment in India

2017 ◽  
Vol 9 (1) ◽  
pp. 50-69 ◽  
Author(s):  
Shanmugam Muthu
Keyword(s):  
Public Investment ◽  
Private Investment ◽  
Infrastructure Investment ◽  
Public Infrastructure ◽  
Public And Private ◽  
Content Type ◽  
Macroeconomic Uncertainty ◽  
Long Run ◽  
Short Run

Purpose The purpose of this paper is to examine the crowding-in or crowding-out relationship between public and private investment in India. Design/methodology/approach The autoregressive distributed lag (ARDL) bounds testing approach is used to estimate the long run relationship between public and private investment using annual data from 1971-1972 to 2009-2010. Findings Based on the empirical findings, it is observed that aggregate public investment has a positive effect on private investment both in the long run and the short run. In contrast to the findings of previous studies, no significant impact of public infrastructure investment on private investments is found in the long run, while non-infrastructure investment has a positive impact on private investment in the short run. Among the various categories of infrastructure sector, a positive and significant impact in the case of electricity, gas and water supply is observed. Similarly, the result indicates that public investment in machinery and equipment and construction have substantially influenced the private sector machinery and equipment in the long run and the short run. In the case of the role of macroeconomic uncertainty, the results find a negative and significant impact on private investment and the impact is higher in the short run than in the long run. Originality/value The present study extends the literature in three important ways: First, the study attempts to capture heterogeneity of public investment as well as disaggregate effects of two different categories of public infrastructure on private investment. The extent to which two different types of public assets impact the private investment in machinery and equipment investment is also examined. Second, ARDL model is used to examine the long-run relationship between public and private investment. Third, the study incorporates macroeconomic uncertainty into the empirical analysis to examine the role of macroeconomic volatility in determining private investment decision.

Hotel and Dependency Costs of Residents in Old People's Homes

1978 ◽  
Vol 7 (1) ◽  
pp. 1-22 ◽  
Author(s):  
Bleddyn Davies ◽  
Martin R. J. Knapp
Keyword(s):  
Residential Care ◽  
Capital Investment ◽  
Self Care ◽  
Marginal Costs ◽  
Unit Costs ◽  
Long Run ◽  
Average Unit ◽  
Short Run ◽  
The Cost ◽  
Old People's Homes

AbstractA comparison of costs to the organization of alternative forms of care requires estimates for similar types of client. The degree of dependency is the main characteristic in which comparability is necessary with regard to services for the aged. This paper presents estimates of the costs incurred in providing residential care for clients of four degrees of incapacity for self-care – the capacity implicit in Bevan's residential hotel model of the old people's home, and three progressively more severe states of dependency. The estimates are for two cost concepts – average (unit) costs and marginal costs (the cost of caring for an additional person). The paper also estimates both long-run costs (costs that it is appropriate to take into account in decisions in which capital investment in new plant is being considered), and short-run costs (costs that it is appropriate to consider when the issue is the allocation of existing capacity between client groups). It also examines the consequences of the size of the home with regard to costs. Inter alia the paper shows:(a) that the size of home beyond which costs do not fall with scale provides for as many as fifty places (equivalent to an average daily census of forty-six residents); and(b) that, although the dependency components of costs are much smaller than the hotel components, dependency costs are large enough for it to be important to base comparisons of alternative forms of care on estimates of costs for clients which are comparable with respect to dependency.

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