The Role of National Development Fund in Boosting Economic Growth and Curbing Inflation

Document Type : Original Article

Authors

1 Ph.D Candidate in Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran

2 Associate Professor of Economics, Faculty of Economics, Management and Administrative Sciences, Semnan University, Semnan, Iran

3 Associate Professor of Economics, Faculty of Economics and Political Sciences, Shahid Beheshti University, Tehran, Iran

Abstract

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.

Keywords

References

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