Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 Inflation Dynamics and Sticky Information in Iran: Evidence from a DSGE-VAR model 3 44 FA hossein Tavakolian Associate Professor,Faculty of economics, Allameh Tabtaba'I University,Tehran,Iran hossein.tavakolian@atu.ac.ir Y This paper examines inflation dynamics and evaluates the role of sticky information in the Iranian economy. To this end, two New Keynesian models are estimated and compared within a DSGE-VAR framework. The first model is based on Calvo price setting, while the second incorporates dual stickiness in prices and information. In both models, the real sector, monetary block, investment dynamics, foreign reserves, and oil shocks are specified in a comparable manner so that differences in empirical performance can be mainly attributed to the specification of the Phillips curve. The models are estimated using Bayesian methods and the Metropolis-Hastings algorithm. The results indicate that both models satisfy the determinacy conditions, but Bayesian model comparison strongly favors the dual-stickiness model over the Calvo specification. The log marginal data density of the dual-stickiness model is substantially higher than that of the Calvo model, and the Bayes factor provides decisive evidence in favor of the model with sticky information. The posterior estimates also point to a high degree of price rigidity, strong persistence in price-markup shocks, and an important role for monetary, fiscal, and oil shocks in explaining macroeconomic fluctuations in Iran. The findings suggest that inflation persistence in Iran cannot be explained solely by price rigidity and real marginal cost. Rather, delays in information diffusion and expectation updating are also central to the inflation process. From a policy perspective, disinflation in Iran requires not only controlling liquidity growth and aggregate demand, but also improving policy credibility, managing expectations, and enhancing information transparency.   Inflation, Sticky Information, Dual Stickiness, Calvo Pricing, DSGE-VAR, Iranian Economy. http://eprj.ir/article-1-2443-en.html http://eprj.ir/article-1-2443-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 A review of the topic of international risk sharing and interest rate parity 45 77 FA Seyyed Ahmadreza Jalali Naeini Professor, Department of Economics and Systems, Institute for Management and Planning Studies (IMPS), Tehran, Iran. a.jalali@imps.ac.ir N Ehsan Sharifmoghaddam Ph. D. Student, Faculty of Economics,Institute for Management and Planning Studies (IMPS), Tehran, Iran.(Coresponding Author)) Ehsan.Sharifmoghaddam@gmail.com Y This review paper examines the theoretical foundations and empirical limitations of two cornerstone assumptions in international macroeconomics: complete markets and uncovered interest parity (UIP), as derived within the standard New Keynesian Small Open Economy (NK SOE) framework. Theoretically, the assumption of complete international financial markets yields a strong risk-sharing condition, linking domestic consumption directly to world consumption and the real exchange rate. Simultaneously, allowing households to choose between domestic and foreign bonds delivers the UIP condition, which posits that interest rate differentials are entirely offset by expected nominal exchange rate depreciation. While these derivations provide a tractable and elegant benchmark, their empirical predictions systematically fail. Risk-sharing is rejected by the data as shown in the Backus-Smith puzzle; whereas UIP is consistently violated by the forward premium puzzle. Confronted with these persistent anomalies, the literature has transitioned away from the complete markets paradigm toward richer frameworks that incorporate incomplete markets, financial frictions, deviations from rational expectations, time-varying risk premiums, and pricing-to-market behavior. This survey traces that evolution, highlighting how each theoretical modification strives to reconcile the elegant micro-founded model with the unruly dynamics observed in actual exchange rates and international consumption patterns.   complete market, international risk sharing, uncovered interest rate parity, risk premium, terms of trade, new Keynesian open small economy http://eprj.ir/article-1-2454-en.html http://eprj.ir/article-1-2454-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 Investigating the Asymmetric Effects of Government Budget Imbalances on Liquidity Growth in Iran 79 114 FA Akbar Komijani Professor of Economics, Faculty of Economics, University of Tehran, Tehran, Iran komijani@ut.ac.ir N Mehdi Hadian Assistant Professor, Department of Monetary and Foreign Exchange Policy Studies, Monetary and Banking Research Institute, Central Bank of Iran, Tehran, Iran m.hadain@mbri.ac.ir N Ali Tavassoli nia Researcher, Monetary and Banking Research Institute, Central Bank of Iran, Tehran, Iran.Corresponding Author) alitavassoli1994@gmail.com Y Government budget imbalance and liquidity growth are among the most important structural challenges facing the Iranian economy and are closely interconnected. This study investigates the asymmetric effects of the government budget balance on liquidity growth in Iran over the period 1989–2024 using the Nonlinear Autoregressive Distributed Lag (NARDL) model. This approach allows the decomposition of positive and negative changes in the budget balance, enabling an examination of the asymmetric response of liquidity growth to improvements and deteriorations in the government budget balance in both the short run and the long run. The control variables include real oil revenues, the free-market exchange rate, and economic growth. The bounds test confirms the existence of a long-run relationship among the variables. The estimation results indicate that deterioration in the government budget balance (movement toward a larger budget deficit) has a positive and statistically significant effect on liquidity growth in both the short run and the long run, whereas improvement in the government budget balance (movement toward a smaller deficit or a budget surplus) has a negative and statistically significant effect. However, the Wald test confirms the presence of asymmetric effects of the government budget balance on liquidity growth in both the short run and the long run. The findings further reveal that the impact of deterioration in the budget balance on liquidity growth is substantially stronger than the impact of improvement, as reflected by the larger absolute value of the long-run coefficient for the positive component (0.468) relative to the negative component (−0.392), suggesting considerable persistence in the fiscal adjustment process. Moreover, real oil revenues and the exchange rate exert positive effects on liquidity growth, while economic growth has a negative effect. The error correction coefficient (−0.684) indicates a relatively rapid adjustment toward the long-run equilibrium. The findings imply that controlling liquidity growth in Iran cannot be achieved solely through monetary policy instruments; rather, it requires sustainable fiscal reforms, reduced dependence on oil revenues, tighter control of current government expenditures, greater transparency in budget financing mechanisms, and stronger coordination between fiscal and monetary policies. Given the confirmed asymmetric effects, preventing the emergence of new fiscal imbalances should be prioritized, as the monetary consequences of fiscal deterioration are stronger and materialize more rapidly than the effects associated with fiscal improvement.   Budget Balance, Liquidity Growth, Fiscal Dominance, Nonlinear Autoregressive Distributed Lag. http://eprj.ir/article-1-2441-en.html http://eprj.ir/article-1-2441-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 Locating industries in Iran, using the economic complexity theory and the concept of tacit knowledge 115 132 FA Ali Esmaeilzadeh M.A. Student Theoritical Economics, Faculty of Economics, University of Tehran, Tehran, Iran Ali.esmaeilzadeh@ut.ac.ir Y Farhad Rahbar Professor, Department of Applied Economics, Faculty of Economics, University of Tehran, Tehran, Iran. frahbar@ut.ac.ir N Muhammad Talebi Ph. D. Student, Faculty of Economics, University of Tehran, Tehran, Iran muhammadtalebi@ut.ac.ir N The spatial concentration of economic activity is a persistent feature of economies at different geographical scales and can play an important role in regional development. Although several strands of economic theory have sought to explain the relationship between agglomeration, growth and development, this study applies the economic complexity framework and interprets industrial concentration through the notion of tacit knowledge. The central premise is that the technological relatedness of firms shapes the scope of local knowledge spillovers: firms are more likely to benefit from such spillovers when the tacit capabilities embedded in their activities are similar. Using data on industrial establishments with ten or more employees, classified at the ISIC level, technological linkages among industries are estimated for Iran’s provinces over 2011–2019. The number of establishments is used to construct an industrial space that represents relatedness among industries. Yazd Province is examined as the case study. The resulting network makes it possible to identify industries that are technologically close to the province’s existing advantageous industries and, therefore, are more plausible candidates for targeted support. Such a policy can simultaneously protect established capabilities and improve the conditions for the emergence of industrial clusters. Industrial development , Economic complexity, Industrial space, Tacit knowledge, Revealed comparative advantage http://eprj.ir/article-1-2265-en.html http://eprj.ir/article-1-2265-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 Investigation of Globalization and the Impact of Physical and Human Capital on Total Factor Productivity Growth in Iran: A Quantile Regression Approach 133 164 FA Abbas Azadi Assistant Professor, Department of Economics, Faculty of Literature and Humanities, Ilam University, Ilam, Iran a.azadi@ilam.ac.ir Y safoura kaki Master's degree, Department of Economics, Faculty of Literature and Humanities, University of Ilam, Ilam, Iran kakisafora@gmail.com N Physical and human capital in promoting growth and productivity are among the most important issues that have received the attention of economists. Achieving economic growth has been one of the main concerns of economists in recent decades and requires more attention to special mechanisms such as quantitative and qualitative indicators, physical and human capital, and globalization. Globalization and human capital can promote growth and productivity if used correctly. In view of this, the aim of this study is to examine the impact of physical, human, and globalization capitals on total factor productivity growth in Iran by examining two regression approaches (ARDL) and quantile regression during the period 1978-2023. The findings of this study showed that globalization and physical and human capital had a positive and significant effect on productivity growth in the short and long run and different quantiles. Also, in the ARDL model, short-term imbalances in productivity growth move towards long-term equilibrium with an adjustment of 0.61%. Globalization in the upper quantiles has a decreasing effect, and physical and human capital have an increasing effect on productivity growth. In addition to the main research variables, the effect of the financial development index, exchange rate, and labor force on productivity growth was also examined, and the effect of the financial index was not significant, and an increase in the reinforcing exchange rate had a negative effect on productivity growth, and the effect of the labor force on productivity growth had a positive and significant effect. Finally, the Newey and Powell test was used to examine the impact of productivity growth on independent variables, and it was concluded that there is two-way symmetry.   Globalization, Human capital, productivity, physical capital, Quantile regression http://eprj.ir/article-1-2386-en.html http://eprj.ir/article-1-2386-en.pdf

Institute for Management and Planning studies 3115-7092 3115-7106 31 1 2026 5 1 An Applied Examination of the Comanor-Leibenstein Approach in Measuring the Social Costs of Monopoly: A Case Study of Selected Industries in Iran 165 204 FA erfaneh rasekhjahromi Department of Economics, Shi.C., Islamic Azad University, Shiraz. 2470887682@iau.ir N mehrzad ebrahimi Department of Economics, Shi.C., Islamic Azad University, Shiraz (Corresponding Author). ebrahimi46@iau.ac.ir Y hashem zare Department of Economics, Shi.C., Islamic Azad University, Shiraz. Hashm.zare@iau.ac.ir N This study provides an applied examination of the Comanor-Leibenstein approach in measuring the social costs of monopoly across selected Iranian industries during the period 2002–2022. Within this framework, welfare losses from monopoly are not confined to “allocative inefficiency” but also encompass “X-inefficiency” (resource waste arising from internal managerial shortcomings) as a fundamental component. Using panel data from the Statistical Center of Iran and employing advanced econometric techniques (such as GMM and SUR), key variables of the model—including price elasticity of demand, marginal cost, and X-inefficiency—were estimated. The findings indicate, first, that basic and strategic industries (such as iron and steel and automobile manufacturing) account for the largest share of total welfare costs. Second, the long-term trend of welfare losses is upward, with a particularly alarming acceleration in the final years of the period (2019–2022), nearly doubling in magnitude. These results highlight the intensification of monopoly-related crises and their direct impact on the decline of public welfare in Iran’s economy.   Monopoly, X-inefficiency, Social Costs of Monopoly, Comanor–Leibenstein approach, Selected Industries http://eprj.ir/article-1-2431-en.html http://eprj.ir/article-1-2431-en.pdf