Mahboubeh Jafari; Karim Eslamlouyan; Ebrahim Hadian; Ali Hossain Samadi
Volume 3, Issue 12 , October 2014, , Pages 20-60
Abstract
The main goal of this paper is to study the effect of social infrastructure on economic growth in a recourse-based economy. To this end, we introduce the quality of social infrastructure into an endogenous growth model. The set up allows us to see how the resource abundance can influence the quality ...
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The main goal of this paper is to study the effect of social infrastructure on economic growth in a recourse-based economy. To this end, we introduce the quality of social infrastructure into an endogenous growth model. The set up allows us to see how the resource abundance can influence the quality of social infrastructure and hence economic growth. We use optimal control theory to solve the model. The analytical solution shows that the impact of non-renewable resources on economic growth depends on the models' parameters. More specifically, we find out that if natural resource abundance leads to deterioration of social infrastructure, it might offset the positive impact of natural resources on economic growth and even might result in lower economic growth rate. We finally calibrate the model for Iran as an energy-rich economy. The calibration results indicate that in order to achieve 8 percent average growth rate, the quality of social infrastructure should improve by at least 4.3 percent. Moreover, when we ignore the quality of social infrastructure, the optimum economic growth rate is found to be 6 percent. This shows that it is important to take into consideration the role of social infrastructure in estimating long run economic growth for Iran. The result of sensitivity analysis indicates that one percent improvement in the index of social infrastructure results in 0.42 percent increase in equilibrium growth rate in Iran. This finding has important policy implications for policymakers and social planners in Iran.
Ali Hossein Samadi; Ibrahim Hadian; Mahboubeh Jafari
Volume 2, Issue 7 , July 2013, , Pages 75-101
Abstract
This study investigates the impact of oil price volatility on macroeconomic variables such as investment, unemployment and production based on quarterly data during the period 1386:4-1369:1. To achieve this, permanent and transitory volatility of OPEC oil price estimated by component GARCH model ...
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This study investigates the impact of oil price volatility on macroeconomic variables such as investment, unemployment and production based on quarterly data during the period 1386:4-1369:1. To achieve this, permanent and transitory volatility of OPEC oil price estimated by component GARCH model (CGARCH). Then, using the Impulse response function, the impact of permanent and transitory volatility of oil prices on macroeconomic variables has been analyzed. The results indicate that permanent uncertainty arising from changes in oil prices has led to decline investment and production and to rise unemployment. And the impact on these variables is permenant. It is indicated that investment and production has declined and unemployment has increased due to oil price uncertainty and this process is accompanied by a high volatility.
