Decomposition of Quality Growth in the I.R. of Iran during 1971-2013

Hossein Bastanzad () and Mohammad Valipour Pasha ()
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Hossein Bastanzad : Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI)
Mohammad Valipour Pasha : Monetary and Banking Research Institute (MBRI), Central Bank of the Islamic Republic of Iran (CBI)

Journal of Money and Economy, 2014, vol. 9, issue 1, 31-56

Abstract: Quality Growth Index (QGI) is affected by two sets of combined-structural and social indicators. Structural indicator contributes to achieve the main target of sound-sustainable-competitive output growth. By the way, the sound output growth should enhance social-public services and living standards. Although QGIs are weightedly computed based on different scenarios, the trend of the QGIs and coefficient of variation of the QGIs indicate the robustness of results. The correlation among QGI and social sub-components highlights a positive relationship between QGI and school enrollment, per capita income and public spending on education and health. The result of co-integration model indicates that higher government size and devaluation of local currency have evidently exacerbated QGI. Meanwhile, openness and inflation underscore the positive long-run impact over QGI. Vector error correction equation outlines that about 84 percent of a short-term shock to the co-integrating vector will be absorbed in the first period. In this context, the impulse response of the QGI to the exchange rate and government size shocks are diminishingly and negatively permanent while the response of the QGI to the openness shock is significantly and positively permanent.

Keywords: Quality of growth; structural indicators; social indicators (search for similar items in EconPapers)
JEL-codes: I10 I20 I32 O40 O55 (search for similar items in EconPapers)
Date: 2014
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