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Economic Uncertainty and its Effect on Private Sector Investment and Consumption Costs in Iran's Economy
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Majid Momeni *1   , Mohammad Noferesti |
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Abstract: (917 Views) |
The issue of uncertainty and its economic concequences is one of the topics that economic researchers have considered in recent years. In conditions of uncertainty, the decision of economic units to produce, consume and invest, etc., is different from normal conditions. This study aims to explain the concept of uncertainty and determine the index of economic uncertainty for Iran and its impact on the private sector consumption and investment. Therefore, first, the index has been extracted to be a measure of economic uncertainty. Then, the effect of this index on macroeconomic variables, including private sector consumption and fixed capital formation has been investigated using the ARDL method. The result is that uncertainty shocks have a significant effect on these variables. In uncertain conditions in the long term, the elasticity of consumption relative to disposable income is estimated at 0.396 and the elasticity of consumption relative to financial wealth is estimated at 0.219. Investment also has a negative relationship with uncertainty variable.
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Full-Text [PDF 818 kb]
(516 Downloads)
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Type of Study: Case Study |
Subject:
Macroeconomics: Consumption, Saving, Production, Employment, and Investment (E2)
Received: 2022/02/9 | Accepted: 2022/07/3 | Published: 2022/08/20
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