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Investigating the Impact of Trade Shocks on Employment in Tradable and Non-Tradable Sectors in Iran: a Dynamic Stochastic General Equilibrium Model
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Mohammad ali Feizpour *1   , Kazem Yavari1 , Setareh Mansoori1 |
| 1- yazd university |
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Abstract: (609 Views) |
| Empirical research shows that the shocks of the commercial sector can be effective in the employment of different economic sectors of Iran. The effectiveness of sectors' employment is dependent on macroeconomic variables such as inflation rate, wage rate, demand function for production factors, and production level depends on foreign trade side variables. Therefore, the purpose of this study is to investigate the effect of trade shocks on the employment of tradable and non-tradable sectors in Iran's economy. In order to carry out this study, a dynamic stochastic general equilibrium model has been designed for Iran's economy, which has the characteristic of nominal stickiness in the supply and demand side of the entire economy. In this model, the economic units as well as the variables of each relationship are separated according to two parts of non-tradable and tradable goods. Also, in order to model the foreign trade sector, nominal and real exchange rate variables and the terms of trade have been included. The structural parameters of this model have been estimated using seasonal data of 1383-1398 period and Bayesian method. Based on the estimation results, with an increase in the exchange ratio, the level of employment in the import sector increases, but employment in the exchange and non-exchange sectors decreases. Also, with the increase of the real exchange rate, the level of employment in all three sectors of the economy decreases. |
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Full-Text [PDF 1041 kb]
(280 Downloads)
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Type of Study: Theoretical Article |
Subject:
Prices, Business Fluctuations, and Cycles (E3)
Received: 2021/03/1 | Accepted: 2022/03/6 | Published: 2022/08/20
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