Journal of Economic Modeling Research

In economic, the degree of intervention of policymakers in creation of economic stability and the response to economic fluctuations is one of the most important problems. The higher the share of efficient shocks in economic fluctuation, the lower the degree of policy response. This study evaluates the contribution of efficient shocks in creating of economic fluctuations and also estimates potential and efficient economic growth in Iran by using the seasonal data over 1988-2015 and the Dynamic Stochastic General equilibrium Approach. The results of DSGE estimation show that the high share of economic fluctuations in Iran is inefficient and monetary shocks accounted over 70 percent of economic fluctuation. Also, the estimation of potential and effective growth over 1988-2015 implies that efficient growth is smoother than potential and real growth.  The sustainability of the effect of technology shock on production indicates the importance of paying attention to the growth of technology and productivity in the Iranian economy. Therefore, focusing on long-term growth has more benefits than focusing on business cycles.

Natural resource rent affects countries’ economies through various channels. Revenues from the natural resources sales are expected to boost countries' economic growth, but the economic experience of recent decades reveals the numerous economic problems in these countries, the most important of which may be the increase in the shadow economy size. Moreover, the institutions specify the significant economic axes like resources and assets distribution in the community, so that the level of institutional quality brings about the optimal resource directing and their allocation through economic stability and affects the shadow economy volume by increasing economic stability and reducing uncertainty. The purpose of the present study was to examine the effect of natural resource rent and institutional quality on the shadow economy in 87 countries with high and low inflation rates from 2000 to 2018. The analysis method was system generalized-method of moments (System GMM). Smart PLS software was used to estimate the shadow economy. The results indicated that in both low-inflation and high-inflation countries, the increase in institutional quality has reduced the size of the shadow economy, and the rent of natural resources has had a positive relationship with the volume of the shadow economy

There is a situation that due to economic shocks and imbalances in structural budgets and its continuation leads to stress in governments in uncertainty conditions. Fiscal stress as a volatile situation in financing of local governments can exacerbate the inability of governments to meet short-term and long-term fiscal commitments and excessive dependence on the central government. So the positive and negative effects of stress are related to the actions and responses of central and local governments. It is essential that policymakers in central and local governments pay attention to accurate and timely signs of fiscal stress for respond to stresses effects. In this study, we tried to clarify the fiscal situation in 31 provinces of Iran by calculating the local fiscal stress index from variables of fiscal structure and budget of each province and then estimate the threshold and spatial effects of the index through Panel Smooth Transition Regression method on economic growth and employment over the period 2005-2017. The results show that border provinces have the highest stress among other provinces, and provinces located in the center or near the capital have less stress. These results indicate the high centralism that exists in the provinces of Iran and has hindered the fiscal independence of local governments so that they can control and regulate their own revenues and expenditures, and in this case, they suffer less fiscal pressure and stress.