The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran
This study investigates how fiscal policy shocks affect macroeconomic activities in an oil exporting economy using a real business cycle model (RBC). We make distinction between public sector of economy from private sector and evaluate the effect of public crowded- (in or out) effect on private sect...
| Main Authors: | , |
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2017-12-01
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| Series: | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| Subjects: | |
| Online Access: | https://joer.atu.ac.ir/article_8564_e8f94ff04050da56ec42ac1724847bbf.pdf |
| _version_ | 1797375690246455296 |
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| author | Naser Khiabani mahbubeh delfan |
| author_facet | Naser Khiabani mahbubeh delfan |
| author_sort | Naser Khiabani |
| collection | DOAJ |
| description | This study investigates how fiscal policy shocks affect macroeconomic activities in an oil exporting economy using a real business cycle model (RBC). We make distinction between public sector of economy from private sector and evaluate the effect of public crowded- (in or out) effect on private sector. Our findings indicate that in Iran, a positive fiscal expansion- a positive consumption expenditure shock- does not have a positive, sizeable and permanent effect on the investment, employment and production of private sector. On the other hand, the results show that the shock has a negative effect on private sector consumption expenditure. This result is consistent with the Ricardian equivalence theorem, suggesting that a government cannot stimulate spending since people assume that whatever is gained now will be offset by higher taxes in the future. |
| first_indexed | 2024-03-08T19:28:04Z |
| format | Article |
| id | doaj.art-f8eb405e14ca4e51b81d6f8d288d60dd |
| institution | Directory Open Access Journal |
| issn | 1735-210X 2476-6453 |
| language | fas |
| last_indexed | 2024-03-08T19:28:04Z |
| publishDate | 2017-12-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī |
| spelling | doaj.art-f8eb405e14ca4e51b81d6f8d288d60dd2023-12-26T08:03:03ZfasAllameh Tabataba'i University PressFaslnāmah-i Pizhūhish/Nāmah-i Iqtisādī1735-210X2476-64532017-12-011767679110.22054/joer.2018.85648564The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from IranNaser Khiabani0mahbubeh delfan1..This study investigates how fiscal policy shocks affect macroeconomic activities in an oil exporting economy using a real business cycle model (RBC). We make distinction between public sector of economy from private sector and evaluate the effect of public crowded- (in or out) effect on private sector. Our findings indicate that in Iran, a positive fiscal expansion- a positive consumption expenditure shock- does not have a positive, sizeable and permanent effect on the investment, employment and production of private sector. On the other hand, the results show that the shock has a negative effect on private sector consumption expenditure. This result is consistent with the Ricardian equivalence theorem, suggesting that a government cannot stimulate spending since people assume that whatever is gained now will be offset by higher taxes in the future.https://joer.atu.ac.ir/article_8564_e8f94ff04050da56ec42ac1724847bbf.pdfgovernment consumption expenditure shocksbusiness cycleprivate sectordynamic stochastic general equilibrium model |
| spellingShingle | Naser Khiabani mahbubeh delfan The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran Faslnāmah-i Pizhūhish/Nāmah-i Iqtisādī government consumption expenditure shocks business cycle private sector dynamic stochastic general equilibrium model |
| title | The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran |
| title_full | The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran |
| title_fullStr | The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran |
| title_full_unstemmed | The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran |
| title_short | The Effects of Fiscal Policy on Macroeconomic Activities: Evidence from Iran |
| title_sort | effects of fiscal policy on macroeconomic activities evidence from iran |
| topic | government consumption expenditure shocks business cycle private sector dynamic stochastic general equilibrium model |
| url | https://joer.atu.ac.ir/article_8564_e8f94ff04050da56ec42ac1724847bbf.pdf |
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