bu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220241221Investigating the Effect of Climate Change on the Growth of the Gross Domestic Product of Iran's Provinces in Different Periods of TimeInvestigating the Effect of Climate Change on the Growth of the Gross Domestic Product of Iran's Provinces in Different Periods of Time939569210.22084/aes.2024.29480.3701FALotfaliAzariPh.D. Candidate in Economics, Department of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran.0009-0006-5964-3635Ali AkbarNaji MeidaniAssociate Professor, Department of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran (Corresponding Author)0000-0002-0455-1585NargesSalehniaAssociate Professor, Department of Economics, Faculty of Administrative and Economic Sciences, Ferdowsi University of Mashhad, Mashhad, Iran0000-0002-7505-5335Journal Article20240616The extent of the effects and consequences of climate change on various dimensions of human life today has made this phenomenon more than an environmental issue and highlighted its economic aspects with regard to its effects on economic development, poverty, inequality and prosperity. Economic analysis of climate change, especially in different time periods, requires estimates at national and local levels. In view of conducting some limited and mostly partial studies on the economic impact of changing weather conditions in Iran, in this article using the economic production data and new calculation of weather variables for the provinces of the country between 2000 to 2020, it has been possible to estimate the impact of climate change on different time scales by using annual panel model and long difference model. The results show that there is a negative effect of changes in temperature and precipitation simultaneously and with a delay of one year on the production of Iranian provinces, although the value of these coefficients is very low. In addition, these changes affect short-term production and long-term growth. However, it can be claimed that there is no long-term effect between precipitation levels and changes in production, unlike temperature levels. Also, a significant negative effect of intermittent changes in temperature on production can be seen, and a positive effect can be extracted regarding intermittent changes in precipitation. In the regression of the long difference, there was no evidence that the temperature level (or the amount of precipitation) has an effect on the production of the provinces in long periods, although the change in precipitation has a greater influence in longer periods, and unlike temperature, its effect It is not rejected in shorter periods of time either.The extent of the effects and consequences of climate change on various dimensions of human life today has made this phenomenon more than an environmental issue and highlighted its economic aspects with regard to its effects on economic development, poverty, inequality and prosperity. Economic analysis of climate change, especially in different time periods, requires estimates at national and local levels. In view of conducting some limited and mostly partial studies on the economic impact of changing weather conditions in Iran, in this article using the economic production data and new calculation of weather variables for the provinces of the country between 2000 to 2020, it has been possible to estimate the impact of climate change on different time scales by using annual panel model and long difference model. The results show that there is a negative effect of changes in temperature and precipitation simultaneously and with a delay of one year on the production of Iranian provinces, although the value of these coefficients is very low. In addition, these changes affect short-term production and long-term growth. However, it can be claimed that there is no long-term effect between precipitation levels and changes in production, unlike temperature levels. Also, a significant negative effect of intermittent changes in temperature on production can be seen, and a positive effect can be extracted regarding intermittent changes in precipitation. In the regression of the long difference, there was no evidence that the temperature level (or the amount of precipitation) has an effect on the production of the provinces in long periods, although the change in precipitation has a greater influence in longer periods, and unlike temperature, its effect It is not rejected in shorter periods of time either.https://aes.basu.ac.ir/article_5692_b597460c506e8e35fb0cc1c1905dd3bc.pdfbu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220241221Income Inequality and the Share of Value Added of Industries: The Role of Production Factors Intensity in Iran’s Economy
Shahin Keshavarz RezaeiIncome Inequality and the Share of Value Added of Industries: The Role of Production Factors Intensity in Iran’s Economy
Shahin Keshavarz Rezaei4171571110.22084/aes.2024.29605.3704FAShahinKeshavarz RezaeiMA Student of Economics, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran.0009-0008-6662-8382Mohammad HassanZareAssistant Professor, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran (Corresponding author)0000-0002-5926-5906MehdiHajaminiAssociate Professor, Department of Economics, Faculty of Economics, Management and Accounting, Yazd University, Yazd, Iran0000-0001-9638-5360Journal Article20240714The type of industries that grow the economy, based on their intensity of production factors, plays a crucial role in shaping income distribution within a society. Failure to consider the intensity of production factors in industries may result in a scenario where production grows while income inequality worsens. The primary objective of this study is to examine how variations in the value-added share of industries, based on production factor utilization intensity, impact income inequality in the economy of Iran. The research employs the generalized method of moments (GMM) and utilizes data from all 31 provinces of the country spanning from 2010 to 2019. Findings indicate that a proportional rise in the value-added share of labor-intensive and natural resource-intensive industries contributes to a decline in income inequality at the national level. Given Iran's significant abundance of labor and natural resources, these industries exhibit comparative advantages in line with the Heckscher-Ohlin theory. Consequently, prioritizing the nation's comparative advantages serves to enhance income distribution, aligning with the Stolper-Samuelson theorem. Thus, transitioning towards a market system mechanism over government intervention in price determination for production factors or industry selection not only preserves economic efficiency but also enhances income distribution compared to the present scenario. The government must provide direct financial assistance to individuals with low incomes and adhere to appropriate strategies for redistributing income via the taxation framework. By doing so, based on the principles outlined in the second welfare theorem, it becomes feasible to attain a new optimal Pareto equilibrium, resulting in a more just allocation of income, all the while preserving overall efficiency.The type of industries that grow the economy, based on their intensity of production factors, plays a crucial role in shaping income distribution within a society. Failure to consider the intensity of production factors in industries may result in a scenario where production grows while income inequality worsens. The primary objective of this study is to examine how variations in the value-added share of industries, based on production factor utilization intensity, impact income inequality in the economy of Iran. The research employs the generalized method of moments (GMM) and utilizes data from all 31 provinces of the country spanning from 2010 to 2019. Findings indicate that a proportional rise in the value-added share of labor-intensive and natural resource-intensive industries contributes to a decline in income inequality at the national level. Given Iran's significant abundance of labor and natural resources, these industries exhibit comparative advantages in line with the Heckscher-Ohlin theory. Consequently, prioritizing the nation's comparative advantages serves to enhance income distribution, aligning with the Stolper-Samuelson theorem. Thus, transitioning towards a market system mechanism over government intervention in price determination for production factors or industry selection not only preserves economic efficiency but also enhances income distribution compared to the present scenario. The government must provide direct financial assistance to individuals with low incomes and adhere to appropriate strategies for redistributing income via the taxation framework. By doing so, based on the principles outlined in the second welfare theorem, it becomes feasible to attain a new optimal Pareto equilibrium, resulting in a more just allocation of income, all the while preserving overall efficiency.https://aes.basu.ac.ir/article_5711_c10f48884c9c7fdbd9a7959c59eebea8.pdfbu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220241221The Role of the Unproductive Sector of the Economy and Currency Crisis in Causing InflationThe Role of the Unproductive Sector of the Economy and Currency Crisis in Causing Inflation73101577610.22084/aes.2024.29432.3696FAMohammadMostafazadehPhD Student, Department of Economy, Faculty of Economic and Political Sciences, Shahid Beheshti University, Tehran, Iran0000-0002-4818-1600ParvizDavodiProfessor, Department of Economy, Faculty of Economic and Political Sciences, Shahid Beheshti University, Tehran, Iran0000-0003-1818-4584AliakbarArabmazarProfessor, Department of Economy, Faculty of Economic and Political Sciences, Shahid Beheshti University, Tehran, Iran0000-0002-1023-0614HosseinSamsamiAssistant Professor, Department of Economy, Faculty of Economic and Political Sciences, Shahid Beheshti University, Tehran, Iran.0000-0002-3270-6521Journal Article20240604In recent decades, inflation has become one of the most important issues in Iran's economy, and the question arises as to what factor has caused prices to continue to be high. The current research has examined the issue of the unproductive sector of the economy and the currency crisis and their effect on inflation in the period of 1991-2022. In this regard, the PCA econometric method has been used to combine the variables, the Hodrick-Prescott filter to identify the currency crisis, and the ARDL method to estimate the research models. According to the results; the share of the underground economy in the GDP has a positive effect on inflation, and with an increase of one percent, inflation increases by 0.25 units. Also, the coefficient related to the variable of speculation is estimated to be large and more than 14 Therefore, speculation is one of the key factors in creating inflation in Iran. The currency crisis variable has the greatest effect compared to other variables and its coefficient of 17.63 proves that it is one of the most effective factors of inflation in Iran. Liquidity, on the one hand, causes an increase in asset prices, and on the other hand, its growth leads to the growth of inflation, so this result is in accordance with the opinion of those who claim that inflation is a monetary phenomenon. Since the agents of the unproductive sector and the currency crisis in Iran have the biggest role in creating inflation, it is suggested that the country's managers limit informal activities and prevent the creation of a currency crisis by presenting policy packages to reduce inflation.In recent decades, inflation has become one of the most important issues in Iran's economy, and the question arises as to what factor has caused prices to continue to be high. The current research has examined the issue of the unproductive sector of the economy and the currency crisis and their effect on inflation in the period of 1991-2022. In this regard, the PCA econometric method has been used to combine the variables, the Hodrick-Prescott filter to identify the currency crisis, and the ARDL method to estimate the research models. According to the results; the share of the underground economy in the GDP has a positive effect on inflation, and with an increase of one percent, inflation increases by 0.25 units. Also, the coefficient related to the variable of speculation is estimated to be large and more than 14 Therefore, speculation is one of the key factors in creating inflation in Iran. The currency crisis variable has the greatest effect compared to other variables and its coefficient of 17.63 proves that it is one of the most effective factors of inflation in Iran. Liquidity, on the one hand, causes an increase in asset prices, and on the other hand, its growth leads to the growth of inflation, so this result is in accordance with the opinion of those who claim that inflation is a monetary phenomenon. Since the agents of the unproductive sector and the currency crisis in Iran have the biggest role in creating inflation, it is suggested that the country's managers limit informal activities and prevent the creation of a currency crisis by presenting policy packages to reduce inflation.https://aes.basu.ac.ir/article_5776_cfd2b32e4caf5678c34b631f56c03686.pdfbu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220241221The Study of Monetary Policy Effectiveness Under Different Climate Change Scenarios in IranThe Study of Monetary Policy Effectiveness Under Different Climate Change Scenarios in Iran103133577510.22084/aes.2024.29701.3711FAMaysamNasrindoostPh.D. Student in Economics, Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran0000-0001-6342-7317Mohammad AliFalahiProfessor, Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran (Corresponding Author)0000-0001-7442-4269AliCheshomiAssistant Professor, Department of Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran0000-0002-9409-1251Journal Article20240801There is a widespread belief that pollution and climate change have a negative effect on the economies of different countries. For this reason, today the climate policies are considered to reduce the concentration of greenhouse gases (especially Carbon Dioxide). In addition, economic policies also have some effects on pollution. In particular, it is said that monetary policy is not only for spurring economic growth but also an important tool for controlling CO<sub>2 </sub>emission, too. Then, a question is raised here that how does the effectiveness of monetary policy change in controlling inflation under different scenarios of climate change in Iran? The hypothesis of the current research is that monetary policy in controlling inflation is more effective in severe climate changes. For testing, an E-DSGE model was designed so that it can take into account macroeconomic and climate policy considerations at the same time. The results showed that after the occurrence of climate changes, total factors productivity, investment, capital stock and production will decrease and these will be almost permanent if the climate changes are not severe. But the central bank, in the face of extreme climate changes, implements a more extreme expansionary monetary policy. The interest rate will decrease further, and the savings will be converted into consumption for reconstruction and as a result it neutralizes part of the effects of inflation caused by the implementation of such policy. Therefore, “creative destruction” occurs in the case of severe climate change and “no-recovery” occurs in the case of moderate climate change.There is a widespread belief that pollution and climate change have a negative effect on the economies of different countries. For this reason, today the climate policies are considered to reduce the concentration of greenhouse gases (especially Carbon Dioxide). In addition, economic policies also have some effects on pollution. In particular, it is said that monetary policy is not only for spurring economic growth but also an important tool for controlling CO<sub>2 </sub>emission, too. Then, a question is raised here that how does the effectiveness of monetary policy change in controlling inflation under different scenarios of climate change in Iran? The hypothesis of the current research is that monetary policy in controlling inflation is more effective in severe climate changes. For testing, an E-DSGE model was designed so that it can take into account macroeconomic and climate policy considerations at the same time. The results showed that after the occurrence of climate changes, total factors productivity, investment, capital stock and production will decrease and these will be almost permanent if the climate changes are not severe. But the central bank, in the face of extreme climate changes, implements a more extreme expansionary monetary policy. The interest rate will decrease further, and the savings will be converted into consumption for reconstruction and as a result it neutralizes part of the effects of inflation caused by the implementation of such policy. Therefore, “creative destruction” occurs in the case of severe climate change and “no-recovery” occurs in the case of moderate climate change.https://aes.basu.ac.ir/article_5775_7a5200e5e9b3a893e1c2b0ccba7dd72f.pdfbu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220241221Shadow Price of Water and Agricultural Competitiveness: An Empirical Study for Iran’s Selected Agricultural Products Using System DynamicsShadow Price of Water and Agricultural Competitiveness: An Empirical Study for Iran’s Selected Agricultural Products Using System Dynamics135174581110.22084/aes.2024.29672.3709FASaeedRasekhi1. Professor, Department of Energy Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran, Babolsar, Iran, (Corresponding Author).0000-0002-6280-7243SaberShakeri2. MA in Economic Systems Planning, Department of Energy Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran, Babolsar, Iran0009-0001-3060-3270ShahryarZaroki3. Associate Professor, Department of Energy Economics, Faculty of Economic and Administrative Sciences, University of Mazandaran, Babolsar, Iran0000-0002-7078-4547AtenaSalmanpour AhmadiMA in Economic Systems Planning, Department of Economics and Accounting, Faculty of Industries and Management, Shahrood University of Technology, Shahrood, Iran0009-0001-5598-3409Journal Article20240728The agriculture sector, as a key sector in the national economy, plays an important role in food security and economic development. Iran has a special position in the production of agricultural products with its climatic diversity and unique features, but due to dry and semi-arid weather conditions and scattered rainfall, it faces the problem of water scarcity. This issue has caused the inconsistency between water scarcity and agricultural competitiveness. The main purpose of the present research is to answer the question whether the shadow price of water is effective on the competitiveness of the agricultural sector. For this purpose and in the first stage, using the production function approach, the shadow price of selected Iranian agricultural products (including wheat, rice, potato and corn in selected provinces) was estimated during the period of 2001-2018 (based on the latest available data) and then in the next step, the research question was answered with the approach of system dynamics. The results of the simulation and sensitivity analysis of the model show that by applying the shadow price and increasing the price of water, the demand for water consumption in the agricultural sector is reduced, and with the negative effect on the product performance, the competitiveness of the selected agricultural products is reduced. Based on this and considering the strategic importance of the agricultural sector, water pricing should be done with special sensitivity, but technological and soft measures to save and increase water productivity in the agricultural sector and to improve the optimal cultivation pattern as well as the foreign trade pattern are essential.The agriculture sector, as a key sector in the national economy, plays an important role in food security and economic development. Iran has a special position in the production of agricultural products with its climatic diversity and unique features, but due to dry and semi-arid weather conditions and scattered rainfall, it faces the problem of water scarcity. This issue has caused the inconsistency between water scarcity and agricultural competitiveness. The main purpose of the present research is to answer the question whether the shadow price of water is effective on the competitiveness of the agricultural sector. For this purpose and in the first stage, using the production function approach, the shadow price of selected Iranian agricultural products (including wheat, rice, potato and corn in selected provinces) was estimated during the period of 2001-2018 (based on the latest available data) and then in the next step, the research question was answered with the approach of system dynamics. The results of the simulation and sensitivity analysis of the model show that by applying the shadow price and increasing the price of water, the demand for water consumption in the agricultural sector is reduced, and with the negative effect on the product performance, the competitiveness of the selected agricultural products is reduced. Based on this and considering the strategic importance of the agricultural sector, water pricing should be done with special sensitivity, but technological and soft measures to save and increase water productivity in the agricultural sector and to improve the optimal cultivation pattern as well as the foreign trade pattern are essential.https://aes.basu.ac.ir/article_5811_bdc8b08ca966b6626e1f186f03c9a060.pdfbu ali sina universityJournal of Applied Economics Studies in Iran2322-2530135220250219Investigating the Asymmetry of Exchange Rate Pass-Through to Expected Inflation in Iran Using NARDL ApproachInvestigating the Asymmetry of Exchange Rate Pass-Through to Expected Inflation in Iran Using NARDL Approach175196553910.22084/aes.2024.29151.3683FAMehdiAzimzadehMA in Economics, Department of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran0009-0005-0317-2224ShahramFattahiAssociate Professor, Department of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran (Corresponding Author)0000-0002-7507-0439AliFlahatiAssociate Professor, Department of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran0000-0003-2880-6674Journal Article20240327Exchange rate changes are one of the factors affecting inflation and expected inflation that affect many economic variables in Iran. The phenomenon of exchange rate pass-through explains the relationship between changes in the value of the national currency and foreign trade relations of a country. Therefore, it is necessary to investigate the degree of exchange rate pass-through to the expected inflation in order to implement anti-inflationary economic policies. The aim of this paper is to investigate the asymmetry of exchange rate pass-through to the expected inflation in Iran using the NARDL approach based on time series data during 1990-2020. The results show that the effect of positive exchange rate shocks on expected inflation in the short and long term is negative and significant but negative exchange rate shocks have a negative and insignificant effect. Also, the effect of foreign exchange shocks on expected inflation is symmetric in the short term while the effect of foreign exchange shocks on expected inflation is asymmetric in the long run. Therefore, the central bank can implement its policies effectively by targeting inflation and focusing on the inflation expectations channel.Exchange rate changes are one of the factors affecting inflation and expected inflation that affect many economic variables in Iran. The phenomenon of exchange rate pass-through explains the relationship between changes in the value of the national currency and foreign trade relations of a country. Therefore, it is necessary to investigate the degree of exchange rate pass-through to the expected inflation in order to implement anti-inflationary economic policies. The aim of this paper is to investigate the asymmetry of exchange rate pass-through to the expected inflation in Iran using the NARDL approach based on time series data during 1990-2020. The results show that the effect of positive exchange rate shocks on expected inflation in the short and long term is negative and significant but negative exchange rate shocks have a negative and insignificant effect. Also, the effect of foreign exchange shocks on expected inflation is symmetric in the short term while the effect of foreign exchange shocks on expected inflation is asymmetric in the long run. Therefore, the central bank can implement its policies effectively by targeting inflation and focusing on the inflation expectations channel.https://aes.basu.ac.ir/article_5539_f998fe2862e4dbab7e4d18de41d02d3b.pdf