Shahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822The Role of National Development Fund in Boosting Economic Growth and Curbing InflationThe Role of National Development Fund in Boosting Economic Growth and Curbing Inflation12710096310.29252/jem.2021.220590.1573FAZahraNorouziPh.D Candidate in Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, IranMajeedMaddahAssociate Professor of Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, IranMohammadNoferestiAssociate Professor of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, IranJournal Article20210208Since the foundation of National Development Fund (NDF) in 2010 until 2019, more than 100 billion Dollars of oil export revenues are held under its management. The NDF missions are set to finance private investments and save the Nation’s Wealth for the next generations. In this article we have tried to show the economic impact of NDF’s presence in the Iranian economy and asses its success on boosting economic growth and curbing inflation. In doing so, we have constructed a dynamic structural macro-econometric model, consisting of 25 behavioral equations, 7 connecting equations and 62 identities and definitional equations, covering 200 economic variables at the macro level. The parameters of the model are estimated in co-integration concept by adapting the latest achievements in time series analysis. The data used are for the period 1338 - 1396. Dynamic simulations are used to validate the consistency of the model. To assess the impact of NDF's presence in the Iranian economy, we have removed NDF from the model and performed a dynamic simulation for the period 1990 - 1996. Then the results are compared with the case of NDF’s presence in the economy. We found that because of NDF's presence, the GDP growth is 2.2 percent higher on the average, while inflation rate and unemployment rate are on the average lower by 1.5 and 2.1, respectively.Since the foundation of National Development Fund (NDF) in 2010 until 2019, more than 100 billion Dollars of oil export revenues are held under its management. The NDF missions are set to finance private investments and save the Nation’s Wealth for the next generations. In this article we have tried to show the economic impact of NDF’s presence in the Iranian economy and asses its success on boosting economic growth and curbing inflation. In doing so, we have constructed a dynamic structural macro-econometric model, consisting of 25 behavioral equations, 7 connecting equations and 62 identities and definitional equations, covering 200 economic variables at the macro level. The parameters of the model are estimated in co-integration concept by adapting the latest achievements in time series analysis. The data used are for the period 1338 - 1396. Dynamic simulations are used to validate the consistency of the model. To assess the impact of NDF's presence in the Iranian economy, we have removed NDF from the model and performed a dynamic simulation for the period 1990 - 1996. Then the results are compared with the case of NDF’s presence in the economy. We found that because of NDF's presence, the GDP growth is 2.2 percent higher on the average, while inflation rate and unemployment rate are on the average lower by 1.5 and 2.1, respectively.https://ecoj.sbu.ac.ir/article_100963_406a620413833a4fc470b8c05d2a08ac.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822Investigating the Relationship between Government Size and Income Inequality in Iran: The MS-VAR ApproachInvestigating the Relationship between Government Size and Income Inequality in Iran: The MS-VAR Approach296410096410.29252/jem.2021.185532.1532FAJalalMontazeri ShoorekchaliAssistant Professor of Economics, Department of Economics and Management, Institute for Humanities and Cultural Studies, Tehran, IranMehdiZahed GharaviAssociate Professor of Economics, Faculty of Humanities Sciences, Ayatollah Boroujerdi University, Boroujerd, IranJournal Article20201123The relationship between government size and income inequality is a challenging issue in the public sector economics. Accordingly, this study investigates the relationship between government size and income distribution inequality using the Markov Switching Vector Auto-regression (MS-VAR) Model in the Iranian economy for 1969-2017 period. The findings confirm the view of Hamilton (1998) and show that the relationship between government size and income inequality is not a linear relationship in the Iranian economy, and time requirements have influenced it. In addition, the findings show that there was a positive unidirectional causal relationship from income inequality to government size in zero regime (during 1969-1983), while no causal relationship was observed between these two variables in regime one (during 1984-2017). In other words, the effort to improve the income distribution situation - along with the abundance of oil revenues - can be considered one of the factors of large government size in 1969-1983. Also, neither of the two regimes under study, the larger size of government has not led to an equal distribution of income in the Iranian economy.The relationship between government size and income inequality is a challenging issue in the public sector economics. Accordingly, this study investigates the relationship between government size and income distribution inequality using the Markov Switching Vector Auto-regression (MS-VAR) Model in the Iranian economy for 1969-2017 period. The findings confirm the view of Hamilton (1998) and show that the relationship between government size and income inequality is not a linear relationship in the Iranian economy, and time requirements have influenced it. In addition, the findings show that there was a positive unidirectional causal relationship from income inequality to government size in zero regime (during 1969-1983), while no causal relationship was observed between these two variables in regime one (during 1984-2017). In other words, the effort to improve the income distribution situation - along with the abundance of oil revenues - can be considered one of the factors of large government size in 1969-1983. Also, neither of the two regimes under study, the larger size of government has not led to an equal distribution of income in the Iranian economy.https://ecoj.sbu.ac.ir/article_100964_0a9e00949fc72b89847c5b179ea7df38.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822The Criticism of Money Base Multiplier Theory and Some Macroeconomic Implications of Credit Creation Theory of BankingThe Criticism of Money Base Multiplier Theory and Some Macroeconomic Implications of Credit Creation Theory of Banking659610096810.29252/jem.2021.185172.1481FAFarshadMomeniProfessor of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranAbbasShakeriProfessor of Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranMohsenMoghisehPh.D Candidate in Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranJournal Article20200721The debate between supporters of the “Bank’s Credit Creation Theory” and the “Money Base Multiplier Theory” on banks money creation began in the 1920s and before the 2007-2008 financial crisis, which ended with the prevailing of the Money Base Multiplier Theory. But after the financial crisis, many central banks, international financial institutions, and prominent economists acknowledged that the story of the Money Base Multiplier Theory in the intermediary of each bank and the way banking system creates money is wrong. Because of misunderstanding of the banking nature and the process of banking money creation, the financial crisis of the last decade has shown that it was not only a crisis in the economy, but it was also a crisis for economics. The fact that each bank can and does create money (the Credit Creation Theory of Banking) reverses some macroeconomic theories. This paper uses the analytical-descriptive method and the accounting analysis to explain the incorrect reasons of the money base multiplier theory. Eventually, some main macroeconomic implications of credit creation theory of banking such as interest rate, saving and investment are expressed.The debate between supporters of the “Bank’s Credit Creation Theory” and the “Money Base Multiplier Theory” on banks money creation began in the 1920s and before the 2007-2008 financial crisis, which ended with the prevailing of the Money Base Multiplier Theory. But after the financial crisis, many central banks, international financial institutions, and prominent economists acknowledged that the story of the Money Base Multiplier Theory in the intermediary of each bank and the way banking system creates money is wrong. Because of misunderstanding of the banking nature and the process of banking money creation, the financial crisis of the last decade has shown that it was not only a crisis in the economy, but it was also a crisis for economics. The fact that each bank can and does create money (the Credit Creation Theory of Banking) reverses some macroeconomic theories. This paper uses the analytical-descriptive method and the accounting analysis to explain the incorrect reasons of the money base multiplier theory. Eventually, some main macroeconomic implications of credit creation theory of banking such as interest rate, saving and investment are expressed.https://ecoj.sbu.ac.ir/article_100968_ebdd81eb80f279fe6e5120bbdfa064ab.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822The Effect of Productivity, Fiscal and Monetary Policies on Social Welfare in Terms of Commitment: Based on Ramsey ProblemThe Effect of Productivity, Fiscal and Monetary Policies on Social Welfare in Terms of Commitment: Based on Ramsey Problem9712410096510.29252/jem.2021.184876.1448FAMaryamEmamimibodiAssistant Professor of Economics, Islamic Azad University, Shahinshar Branch, Shahinshar, Iran0000-0001-6210-8007MajidSametiProfessor of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan, Isfahan, IranHossienSharifi RananiAssociate Professor of Economics, Department of Economics, Islamic Azad University, Isfahan Branch (Khorasgan), Isfahan, Iran0000-0002-5072-3616Journal Article20200420Economic policy making refers to the set of government actions and interventions in the economy to achieve economic and social goals, using the tools under its control within the frame of facilities and constraints. The main purpose of government policy is moving from existing condition and reaching to the optimal condition. The main purpose of this paper is to measure the effect of fiscal and monetary policies and changes in productivity on the level on social welfare in terms of commitment Based on Ramsey problem. Therefore, using the Ramsey problem, the variables of private sector consumption and leisure are extracted, calibrated, and is simulated in the form of three scenarios for commitment and non-commitment conditions for the period of 1971-2016. The results show that; The highest growth in consumption and welfare is due to the growth of productivity and changes in fiscal and monetary policy have a reducing effect on consumption and welfare. As a result, despite the commitment conditions in the Iranian economy and the acute unemployment problem, the government should pay special attention to the employment of low-income groups in determining fiscal and monetary policy, with a view to increase social welfare in the country's economic programs.Economic policy making refers to the set of government actions and interventions in the economy to achieve economic and social goals, using the tools under its control within the frame of facilities and constraints. The main purpose of government policy is moving from existing condition and reaching to the optimal condition. The main purpose of this paper is to measure the effect of fiscal and monetary policies and changes in productivity on the level on social welfare in terms of commitment Based on Ramsey problem. Therefore, using the Ramsey problem, the variables of private sector consumption and leisure are extracted, calibrated, and is simulated in the form of three scenarios for commitment and non-commitment conditions for the period of 1971-2016. The results show that; The highest growth in consumption and welfare is due to the growth of productivity and changes in fiscal and monetary policy have a reducing effect on consumption and welfare. As a result, despite the commitment conditions in the Iranian economy and the acute unemployment problem, the government should pay special attention to the employment of low-income groups in determining fiscal and monetary policy, with a view to increase social welfare in the country's economic programs.https://ecoj.sbu.ac.ir/article_100965_c97caacc23b93f2a9f3cdcbd2f7b0f64.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822Investigating the Effects of Shock Caused by Covid-19 Virus on the Iran's Economy: A GVAR ApproachInvestigating the Effects of Shock Caused by Covid-19 Virus on the Iran's Economy: A GVAR Approach12515310096710.29252/jem.2021.185229.1492FAEmadodinSakhaeiPh.D Candidate in Economics, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranMortezaKhorsandiAssociate Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranTeymourMohammadiAssociate Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, Iran0000-0003-4394-774XHamidrezaArbabAssociate Professor, Faculty of Economics, Allameh Tabataba’i University, Tehran, IranJournal Article20200806The corona-virus epidemic and its rapid spread have had major negative effects on the global economy. This article examines its negative shock on the economy of Iran and several selected countries. For this purpose, the Global Vector Auto-regressive model (GVAR) and seasonal data for the years 1990-2019 for 34 countries have been used. The results show that the negative shock of global GDP immediately reduces China's production by 0.7% and is stable for three years. The global shock has slowed economic growth in India, Europe, and the United States by 0.18, 0.5 and 0.2, respectively. Although negative shock to stock markets has not affected the Iranian capital market but has caused the collapse of the capital market in selected countries. Corona virus affects Iran’s economy only by reducing GDP, but since it is a shock to production, its effect is more lasting, and in the first stage, it reduces GDP by 1.9%.The corona-virus epidemic and its rapid spread have had major negative effects on the global economy. This article examines its negative shock on the economy of Iran and several selected countries. For this purpose, the Global Vector Auto-regressive model (GVAR) and seasonal data for the years 1990-2019 for 34 countries have been used. The results show that the negative shock of global GDP immediately reduces China's production by 0.7% and is stable for three years. The global shock has slowed economic growth in India, Europe, and the United States by 0.18, 0.5 and 0.2, respectively. Although negative shock to stock markets has not affected the Iranian capital market but has caused the collapse of the capital market in selected countries. Corona virus affects Iran’s economy only by reducing GDP, but since it is a shock to production, its effect is more lasting, and in the first stage, it reduces GDP by 1.9%.https://ecoj.sbu.ac.ir/article_100967_c067137083406237b874c88fb78d5e88.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822Measuring Remote Labor Index and Supply Shock of the Covid-19 Virus in IranMeasuring Remote Labor Index and Supply Shock of the Covid-19 Virus in Iran15518010096610.29252/jem.2021.185211.1487FAMohammad SharifKarimiAssociate Professor of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran0000-0002-5967-6756ElhamHeshmati DayariPh.D Candidate in Economics, Faculty of Social Sciences, Razi University, Kermanshah, IranAzadehShahabPh.D Candidate in Economics, Faculty of Social Sciences, Razi University, Kermanshah, IranJournal Article20200723The outbreak and spread of the corona virus in the world have caused great suffering and hardship to human society. But this suffering is not limited to disease and mortality and has put the global economy at risk. The shock caused by this virus on the world economy is very significant. Many countries have extensive quarantines and restrictions to curb the virus. Iran has also tried to control the spread of the disease by using social distancing and closing down non-essential jobs. Hence, Corona has been able to cause major economic problems. Therefore, in this study, the remote labor index (RLI) was calculated. Jobs and activities are classified into essential and non-essential. The data of 1397 for jobs and activities from the Statistics Center of Iran have been used, to calculate the supply shock caused by the Corona virus on the economy of Iran. The results show that the total supply shock was equal to 34% and according to the main occupational groups, the highest supply shocks were in the occupational groups of "artisans and related occupations" and "simple workers" with 70% and 62%, respectively.The outbreak and spread of the corona virus in the world have caused great suffering and hardship to human society. But this suffering is not limited to disease and mortality and has put the global economy at risk. The shock caused by this virus on the world economy is very significant. Many countries have extensive quarantines and restrictions to curb the virus. Iran has also tried to control the spread of the disease by using social distancing and closing down non-essential jobs. Hence, Corona has been able to cause major economic problems. Therefore, in this study, the remote labor index (RLI) was calculated. Jobs and activities are classified into essential and non-essential. The data of 1397 for jobs and activities from the Statistics Center of Iran have been used, to calculate the supply shock caused by the Corona virus on the economy of Iran. The results show that the total supply shock was equal to 34% and according to the main occupational groups, the highest supply shocks were in the occupational groups of "artisans and related occupations" and "simple workers" with 70% and 62%, respectively.https://ecoj.sbu.ac.ir/article_100966_b606bf92456e9be9793595cc958a420b.pdfShahid Beheshti UniversityJournal of Economics and Modelling2476-577511220200822The Dependence of Returns in Stock Exchange Returns and Gold Markets with Spread of Covid-19 Virus in Iran: The Copula Functions ApproachThe Dependence of Returns in Stock Exchange Returns and Gold Markets with Spread of Covid-19 Virus in Iran: The Copula Functions Approach18122110097510.29252/jem.2021.185233.1493FAShahramFattahiAssociate Professor of Economics, Faculty of Social Sciences, Razi University, Kermanshah, IranSaeedKian PoorMA in Economics, Department of Economics, Payame Noor University of Hamedan, Hamedan, Iran.Journal Article20200808The spread of covid19 virus has become an integral part of the world's economies. In this regard, its impact as an effective indicator on financial markets is important. The purpose of this study is modelling the relationship between the returns of stock and gold markets with the corona virus in Iran. Hence in this study, the relationship between stock market and gold market returns and corona virus are analyzed using the copula functions method and Monte Carlo simulation with Markov chain in the period 2020 with daily data by MATLAB software. According to the results of this study, there is a similar sequence between stock market returns and corona virus for highest and lowest sequences, and their dependence will increase at the time of strong positive and negative returns. In other words, there is transmission. Also, there is a symmetrical tail dependence between the gold market and corona virus. Thus, the return of the gold market has remained stable during the spread of corona virus.The spread of covid19 virus has become an integral part of the world's economies. In this regard, its impact as an effective indicator on financial markets is important. The purpose of this study is modelling the relationship between the returns of stock and gold markets with the corona virus in Iran. Hence in this study, the relationship between stock market and gold market returns and corona virus are analyzed using the copula functions method and Monte Carlo simulation with Markov chain in the period 2020 with daily data by MATLAB software. According to the results of this study, there is a similar sequence between stock market returns and corona virus for highest and lowest sequences, and their dependence will increase at the time of strong positive and negative returns. In other words, there is transmission. Also, there is a symmetrical tail dependence between the gold market and corona virus. Thus, the return of the gold market has remained stable during the spread of corona virus.https://ecoj.sbu.ac.ir/article_100975_0b55015c1bf3ccc947a1b5c22a5d01bc.pdf