University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Environmental Quality and Growth Effects of Foreign Direct Investment in Nigeria 125 140 58793 10.22059/ier.2016.58793 EN Saibu Muibi Olufemi Department of Economics, Faculty of Social Sciences, University of Lagos, Peter Mesagan Ekundayo Department of Economics, Faculty of Social Sciences, University of Lagos. Journal Article 2016 04 03 Abstract The study examines the growth effects of foreign direct investment on environmental quality in Nigeria between 1970 and 2013. Variables like per capita income, environmental degradation, foreign direct investment, human capital, inflation, trade openness, interest rate, and the interaction term between foreign direct investment and carbon emission were employed in the study. A long run relationship was observed among the variables and foreign direct investment and environmental degradation negatively enhanced growth individually, while the interaction variable positively enhanced economic growth. The study concludes that environmental consideration does not really matter in growth consideration in Nigeria but that carbon emission must not exceed the 67.4% threshold if the economy is to benefit from the interaction between foreign direct investment and carbon emission. Policy makers are encouraged to strike a balance between the quantity of emissions and the amount of economic growth that is suitable for the country since the decision to maintain green growth by developing countries is not an easy one to make.

https://ier.ut.ac.ir/article_58793_399acf7cc40b52c5f7fe3e85af89a39c.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Income Convergence toward USA: New Evidences for Latin and South American Countries 141 162 58794 10.22059/ier.2016.58794 EN Omid Ranjbar Department of Economics, Allameh-Tabataba'i University, Tehran, Iran Tsangyao Chang Department of Finance, Feng Chia University, Taichung, Taiwan. Chien-Chiang Lee Department of Finance, National Sun Yat-sen University, Kaohsiung, Taiwan. Journal Article 2016 05 21 Abstract In this paper we test two versions of convergence hypothesis namely deterministic or conditional convergence and stochastic or catching up hypothesis using Carrion-i-Silvestre et al. (2005) stationary test. The results show Latin and South American countries (LSA) catching up process toward the USA failed in 1980s and somewhat in 1990s. But in 2000s most of them could lie in convergence path. Dispersion of break dates show that structural breaks in LSA convergence were affected by trade policies, terms of trade shocks and also war. For example, terms of trade shocks due to volatility of primary goods prices such as sugar, copper, cotton, petroleum oil, coffee, bauxite, aluminum, and rice affected the convergence process in LSA countries.

https://ier.ut.ac.ir/article_58794_637efd3ca730e90851064dcd8b424dfd.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Aggregate and Disaggregate Energy Consumption Relation with GDP: Evidence for Iran 163 174 58795 10.22059/ier.2016.58795 EN Eisa Maboudian Department of Economics, Islamic Azad University, Central Tehran Branch, Iran Khashayar Seyyed-Shokri Department of Economics, Islamic Azad University, Central Tehran Branch, Iran. Journal Article 2016 04 05 Abstract I n this paper we investigated total energy consumption and its individual forms (oil, natural gas, electricity, renewable energies and coal) relationship with real gross domestic product (GDP) in Iran. We employed Hsiao’s (1981) methodology and annual data which cover 1967-2010 for investigation. The empirical findings indicate there is bidirectional causality effect with real GDP and total energy consumption as well as its three individual forms including, oil, natural gas and electricity. Therefore we can accept feedback hypothesis about total energy consumption-GDP linkage. There is not any causality effect with other individual forms of energy such as renewable energies and coal with GDP. These results are not too surprising for Iran, because share of oil, natural gas and electricity is higher than other forms of energy.

https://ier.ut.ac.ir/article_58795_5f5f18a2efdd8d24bf5001d5a788e74f.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 An Analysis the Effect of Capital Taxation on Allocation of Resources: A Dynamic Equilibrium Model Approach 175 186 58796 10.22059/ier.2016.58796 EN Hojjat Izadkhasti Faculty of Economics and Political Sciences, Shahid Beheshti University. Abbas Arabmazar Faculty of Economics and Political Sciences, Shahid Beheshti University. Journal Article 2016 02 15 Abstract T he return of capital is fundamental to the intertemporal allocation of resources by changing the consumption behavior and capital accumulation over time. Taxation on return of capital increases the marginal product of capital, meaning that capital stock is lower than when capital is not taxed, which results decreased growth and welfare in steady state. This paper studies the impact of capital income taxation on capital stock, output and welfare in a dynamic optimization model. Theoretical and experimental results indicate that any attempt to decrease taxation on return of capital in Iran's economy, will be eventually reached to a higher capital formation, higher output and consumption per capita in the steady state. Finally, leads to higher welfare level in the steady state.

https://ier.ut.ac.ir/article_58796_97c6ad465611b3e4cd1cd6f0dd731e4b.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Assessing the Iranian Fiscal Sustainability in Past and Future through Tax Side of the Economy 187 201 58798 10.22059/ier.2016.58798 EN Mahsa Fathalizadeh Department of Economics, Islamic Azad University. Journal Article 2016 04 05 This paper, I have focused on the tax side of the fiscal policy to investigate the past and future behavior of fiscal sustainability in Iran. To do so, I have employed two different forward-looking and backward-looking approaches. First, the backward-looking approach is the fiscal policy rule proposed by Daving & Leeper (2011). Precisely, this rule determines that whether the fiscal policy is active (unsustainable) or passive (sustainable). To estimate the fiscal policy rule, I have exploited Markov switching model (MSM) which examines the tax rate response to debt dynamics under multiple regimes. Second, the forward-looking approach is the modified Blanchard’s tax gap indicator (1990) for an oil-producing country. In fact, this indicator predicts the amount of tax adjustment required to stabilize the future amount of government’s debt back to its value in a particular base year. I have used time series data over the period spanning from 1993(Q1) to 2013(Q4).

https://ier.ut.ac.ir/article_58798_619a12aa95c2f5544e07167ac1d30060.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 A Panel Data Analysis of South Korea’s Trade with OPEC Member Countries: The Gravity Model Approach 203 224 58799 10.22059/ier.2016.58799 EN Ehsan Rasoulinezhad World Economy Department, Faculty of Economics, State University of St. Gil Seong Kang Department of Economics, Ministry of Strategy and Finance (MOSF), the Republic of Korea. Journal Article 2016 04 05 Abstract T his paper explains bilateral trade patterns between South Korea and thirteen OPEC member countries over the period 1980-2014 using a gravity model. The estimation results show that the gravity equation fits the data reasonably well. We confirmed the existence of long term relationships between the bilateral trade flows and the main components of gravity model - GDP, income (GDP per capita), the difference in income, exchange rate, the openness level, distance and WTO membership – through the Fixed effects (FE), Random effects (RE) and the FMOLS approaches. The findings show that the trade pattern between South Korea and OPEC member countries relies on the Heckscher-Ohlin (H-O) theory, thus being explained by difference in factor endowments such as energy resources and technology. It is also found out that South Korea – OPEC trade is well explained by the factors that influence the energy security of South Korea such as oil reserves, transportation costs and political stability.

https://ier.ut.ac.ir/article_58799_cdd6d2fcb5efb7932f0ce589c2a4f4f5.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Government and Central Bank Interaction under Uncertainty: A Differential Games Approach 225 259 58801 10.22059/ier.2016.58801 EN Jacob Engwerda Tilburg School of Economics and Management, Tilburg University, Netherlands. Davoud Mahmoudinia Department of Economics, University of Isfahan. Rahim Dalali Isfahani Department of Economics, University of Isfahan. Journal Article 2016 02 08 Abstract Today, debt stabilization in an uncertain environment is an important issue. In particular, the question how fiscal and monetary authorities should deal with this uncertainty is of much importance. Especially for some developing countries such as Iran, in which on average 60 percent of government revenues comes from oil, and consequently uncertainty about oil prices has a large effect on budget planning, this is a significant question. For this reason, we extend in this paper the well-known debt stabilization game introduced by Tabellini (1986). We incorporate deterministic noise into that framework. Also we solve this extended game under a Non-cooperative, Cooperative and Stackelberg setting assuming a feedback information structure. The main result shows that under all three regimes, more active policies are used to track debt to its equilibrium level and the smaller this equilibrium level becomes, the more fiscal and monetary authorities are concerned about noise. Furthermore, the best-response policy configuration if policy-makers are confronted with uncertainty seems to depend on the level of anticipated uncertainty.

https://ier.ut.ac.ir/article_58801_e391c8f9edd172cc57546f33b90759ac.pdf

University of Tehran Iranian Economic Review 1026-6542 20 2 2016 04 01 Exchange Rate Misalignment in Oil Exporting Countries (OPEC): Focusing on Iran 261 276 58802 10.22059/ier.2016.58802 EN Amir H. Mozayani Department of Economics, Tarbiat Modares University Sanaz Parvizi Department of Economics, Tarbiat Modares University Journal Article 2016 05 21 Abstract I n this paper, we investigate the existence and the nature of real exchange rate misalignment in Organization of the Petroleum Exporting Countries (OPEC). To do this we estimated a cross country basic real exchange rate determination model for 1990-2012 and extracted historic trend of misalignment. The results imply that all OPEC countries have had misalignment -of different kinds though- in their real exchange rate. In order to ensure the robustness of results, we also focused on historic trend of real exchange rate misalignment in Iran, which was derived by model, and observed considerable consistency with realities of policy making and economic performances in Iran. This indicated the compatibility of the estimation results with countries’ actual events.

https://ier.ut.ac.ir/article_58802_dc6f41c58fac7b81b2310bc8e0a482d8.pdf