Journal of Economic Modeling Research

Economic Effects of Natural Disasters in terms of Climate Change and Insurance

Leili Niakan

Objective: Natural disasters, especially those caused by climate change, have far-reaching effects on economies and societies. Disasters bring direct and indirect damages that can seriously affect economic growth. It is expected that these damages will increase even more in the future due to climate change and increasing vulnerability of societies. Study has investigated one of the indirect economic effects of natural disasters, i.e. reducing the growth of the gross domestic product (GDP), and the role of insurance in reducing these effect. The main goal of the study is to analyze the impact of natural disasters on economic growth in member and non-member countries of the Organization for Economic Co-operation and Development (OECD) and evaluate the role of insurance in moderating these effects.
Materials and Methods: Using panel data from developed and developing countries and using panel regression models with fixed effects, the research has investigated the effect of natural disasters on GDP growth and the role of insurance in adjusting these effects.
Results: The results show that natural disasters have a significant negative effect on the economic growth of both groups of countries, but insurance significantly reduces these negative effects.
Conclusion: Development of insurance coverage in developing countries can help reduce the negative economic effects caused by natural disasters and strengthen the sustainability of economic growth, especially in countries like Iran.

Modeling the Impact of Money Market Variables on Tehran Stock Index: The Moderating Role of Economic Policy Uncertainty in ARDL Framework

Mohammad Kaveh Barahooei Jahanshahi

The present study aims to model and investigate the impact of money market variables on stock market performance (capital market). Money market variables can directly or indirectly affect stock market performance. This research examines the influence of interest rates, exchange rates, inflation rates, liquidity, and legal reserve rates on the stock price index. Additionally, another objective of this study is to investigate the effect of economic policy uncertainty on the relationship between monetary variables and the aggregate stock price index, and how monetary variables are guided and their impact on the stock market. The research period spans ten years, from 1392 to 1401. The hypothesis testing results, using seasonal time series data and the Autoregressive Distributed Lag (ARDL) model, indicated that the effect of money supply and exchange rate on the aggregate stock price index is positive and significant. However, the effects of the interest rate and legal reserve rate are not significant. Furthermore, based on an index for economic policy certainty, this research demonstrates that the relationship between the interbank interest rate, money supply, legal reserve rate, and exchange rate with the aggregate price index is influenced by economic policy uncertainty.

Comparative Evaluation of Credit Risk Models for Expected Loss Estimation: Implications for Banking Stability

Vahid Majed

Backward-looking approaches to loss recognition are among the main causes of banking crisis. This study, emphasizing the calculation of expected credit portfolio losses, focuses on the implications of credit risk models for banking stability. Given data limitations in Iran, a synthetic dataset consistent with IFRS 9 was generated from existing data. The dataset consists of a credit portfolio with 1,000 loans that were assigned credit ratings based on the empirical frequency distribution, probabilities of default estimated using the beta-binomial distribution, and loan exposures simulated through the truncated Pareto distribution. The generation of standardized synthetic data from available information was based on Monte Carlo simulation with one million iterations. The results indicate that the Vasicek model yields more conservative estimates of expected loss compared with Mixture models, yet its outcomes are more sensitive to changes in default correlation. Credit risk analysts face a trade-off between conservatism and stability. Regulatory focus on setting correlation thresholds can more effectively reduce the likelihood of banking crises and enhance the resilience of the banking system.

Factors Influencing Tax Compliance in OECD Member Countries: A Panel Data Approach Using GMM

Ali Mehdizadeh

Tax compliance is one of the most significant issues in the field of economic management, contributing to financial transparency, economic justice, and the enhancement of government revenue sources. In OECD member countries, tax policies between 1990 and 2022 have been designed to improve tax compliance and strengthen the sustainability of tax revenues. This study examines the determinants of tax compliance in these countries using the Generalized Method of Moments (GMM) for panel data analysis. The results indicate a nonlinear and significant effect of the tax rate and its squared term on tax compliance, suggesting that while a positive relationship exists between the tax rate and compliance up to an optimal threshold, excessive increases in tax rates may reduce compliance. Furthermore, the employment index has a positive and significant effect on tax compliance, highlighting the importance of job creation in expanding the tax base. In contrast, the corruption index has a negative and significant effect on compliance, emphasizing the need to reduce corruption and increase transparency within the tax system. Per capita GDP also exhibits a negative effect on tax compliance, which can be attributed to structural changes in the economy and the fiscal policies of the countries studied. Nevertheless, the ratio of tax revenue to GDP in OECD countries has remained relatively stable and slightly increasing, reflecting the role of reforms and transparency in sustaining their tax systems. The findings of this study can inform the design of effective policies to enhance tax compliance in Iran, including determining optimal tax rates, strengthening employment policies, improving transparency, and reducing corruption within the tax administration.

Analysis of spillovers of fluctuations between performance indicators of metal industries in global crises (emphasis on the Covid-19 health crisis)

samira motaghi

Objective: This research analyzes the spillover of fluctuations on the performance indicators of the metal industries, with an emphasis on the Covid-19 crisis in the period 1390 to 1402 (2011 to 2023).
Materials and Methods For this purpose, the quantile autoregressive panel model has been used, which allows the analysis of nonlinear relationships and quantile-based dependencies between companies. This model examines volatility spillovers in different market conditions (including crisis periods) by focusing on different quantiles (0.25, 0.5, and 0.75).
Results Analyses show that economic fluctuations have particularly affected the financial performance of metal companies, reducing their profitability and liquidity. Also, companies that have been able to respond quickly to market changes and maintain their reputation have performed better.
Conclusion: This research emphasizes the importance of risk management and optimizing financial resources in the face of crises and can be considered as a resource for analysts and managers of the metal industries to improve resilience and performance in crisis situations.
Originality: During the COVID-19 health crisis, the metal industry faced serious challenges due to severe economic fluctuations and disruptions in the supply chain. This study shows that the volatility caused by the Covid-19 crisis has had significant impacts on return on assets, financial constraints, and sales rates in these industries.

Effects of real minimum wage on employment in Iran

hossein nasrollahi

Employment is one of the most important issues that any country faces. Employment plays a vital role not only for individuals but also for the economy as a whole, and provides a deep understanding of the labor market conditions of an economy. In this regard, the minimum wage is an important factor that affects the labor market. The literature on the minimum wage uses two labor market models. The standard competitive model, which predicts that the minimum wage will have negative employment effects. In other words, under conditions of perfect competition, economic theory suggests that a higher minimum wage will lead to job losses, and noncompetitive labor market models, which predict that the minimum wage will have positive employment effects. However, it is generally unclear whether minimum wages have a positive or negative effect on employment, or are ineffective. Therefore, the aim of this study is to examine the effects of the real minimum wage on employment in Iran, within the framework of a multiple regression model and OLS estimation during the period 1379-1400. The results of the regression analysis show that the increase in the real minimum wage has a significant negative effect on employment, so that with a one-unit increase in the real minimum wage, employment decreases by about 0.37 units. Therefore, taking the above into account, it is suggested that the increase in the minimum wage should be made as proportionate as possible to the Labor productivity in the economy