IMPACT OF TRADE AND MACROECONOMIC POLICIES ON INDUSTRIAL GROWTH IN IRAN

Author's Name: Seyed Mohammad Alavinasab
Subject Area: Social Science and Humanities
Subject Economics
Section Research Paper

Keyword:

Monetary, Fiscal, Trade, industrial growth, Iran


Abstract

The study investigates the impact of monetary, fiscal and trade policy on industrial growth in Iran, over the period 1971 – 2012. To achieve this, money supply, government expenditure and trade openness were used as proxies of monetary, fiscal and trade policy respectively. The findings of regression analysis show that in the long run, monetary, fiscal and trade policies exert positive effect on industrial growth. Industrial growth has found to be significantly influenced by fiscal and trade policy, while monetary policy has insignificant impact on industrial growth in long. But in short run the results of estimated Error-correction model indicate that positive significant impact of fiscal and trade policies on industrial growth and in contrast, monetary policy has negative and insignificant effect on industrial growth.

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