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Cyclical Fiscal Policy in Iran: the Role of Various Government Expenditures and Influential Factors
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Hossein Aghilifar1   , Khosrow Piraei *1 , Hashem Zare1 , Mehrzad Ebrahimi1 |
| 1- Islamic Azad University, Shiraz Branch |
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Abstract: (433 Views) |
Government expenditures as an important component of fiscal policy can play an important role in macroeconomic stabilization. Taking cyclical features and behaviors of various types of government expenditures into account, ameliorates the effectiveness of fiscal policy in confronting with economic shocks. This research tries to evaluate the cyclical features of different types of government expenditures and influential factors in Iran's economy by using Iran’s time series data from 1359 to 1398 and a two-stage autoregressive distributed lags model. Based upon the findings of this research, all types of government expenditures in Iran, behave procyclically. Government investment aggravates the fluctuation of fiscal cycles more than government consumption, and the procyclical effect of government investment in machinery is more than the procyclical effect of government investment in construction. In addition, the findings show that adding control variables, affects the logarithm coefficient of GDP in all models and therefore plays an important role in the cyclical behavior of various types of government expenditures. The government debt to GDP ratio and the government income to GDP ratio reduce cyclical fluctuations and the government size, inflation rate and elections intensify cyclical fluctuations.
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Article number: 5 |
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Full-Text [PDF 974 kb]
(358 Downloads)
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Type of Study: Methodological Article |
Subject:
Prices, Business Fluctuations, and Cycles (E3)
Received: 2022/08/22 | Accepted: 2023/03/5 | Published: 2023/09/27
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