Value for money assessment is used in Iran to select appropriate projects for partnership with the private sector by public-private partnership contracts. However, this method merely focuses on the direct effects on the project's level and ignores the economic and social impacts and indirect national and regional impacts. This method also is limited to selecting discount rates and tax position adjustments. It ignores both the benefits users receive from increasing the quality of services through public-private partnerships and the project's financing methods. So ignoring these problems can lead to significant errors in assessments. Therefore, the present paper aims at using a complementary approach to make decisions about investing by public-private partnership method in one of the infrastructures of water resources development in the country. In this regard, the effect of building, financing, and operation of the desalination project and water transfer from the Persian Gulf to industry and mine sectors in the southeastern provinces of the country by a public-private partnership model and using the recursive dynamic FCGE model to Iran's economic growth simulate and compare it to the traditional procurement model. Based on the results, if the project is financed in the traditional procurement model (through increasing tax revenues) and if it is financed through public-private partnerships (through the capital market) without increasing the productivity rate, it has no economic justification. In other words, this project is economically justifiable only if it is implemented by a public-private partnership contract and increasing productivity by at least 0.01% during the operation period.
Iran has faced oil and banking sanctions since 2012. Following the sanctions and instability of the exchange rates, the Rial has sharply lost its value. Rising economic unrest has widened the gap between the official exchange rate and parallel market rate. However, the depreciation of Iran’s Rial does not show a uniform trend, and the decline path has been complicated. We know that sanctions against Iran have created new expectations, concerns, and attention. Google Trends has provided an analytic tool for measuring and monitoring people’s expectations based on their Internet search data. This study attempted to analyze and model the exchange rate trends in Iran using sanctions-related expectations extracted from Google Trends. The Google search index (GSI) of the sanctions demonstrated the agent’s expectations. Monthly data and the autoregressive distributed lag (ARDL) method were used for estimation. The results indicated a significant and positive impact of GSI on the unofficial exchange rate (UER) and just a positive impact on the real unofficial exchange rate (RUER). We can conclude that the effects of sanctions appear partly through changes in people’s expectations that can be extracted using GSI. Moreover, the difference in inflation showed a significant positive effect on the market exchange rate in Iran. Thus, an improvement in the expectations through reducing the international tensions and a perspective shift can strengthen the Rial exchange rate. Moreover, the policymaker can control the volatility and depreciation of the exchange rates in Iran by restricting the M2 growth through an appropriate long-run monetary policy.
The aim of this paper is to investigate possible problems of efficiency arising from the joint exploitation of the common gas pool (South Pars - North Dome, the largest natural gas reservoir in the world) by Iran and Qatar. The problem is related to the difference between private incentives and common goals. In the case of non-renewable resources, a Pareto-optimal joint extraction path could exist, but it is unlikely to occur in reality. We studied the difference in incentives for an optimal exploitation path for Iran and Qatar and found that their joint behavior was likely suboptimal from the perspective of the optimal dynamics of gas resource exploitation. In part, this is related to the difference in wealth, and in part to the sanctions against Iran, which have so far not allowed Iran to participate freely in the world market. Considering that the cost of future gas extraction in Russia's northern fields is likely to increase, a delay in the optimal presence of Iranian gas on the world market may lead to a suboptimal sequence of exploitation of various gas fields, which would mean both problems for the profitability of investments in Russia and higher world prices for natural gas in the future.
Large external debt stock has been identified as one of the most important factors which have restricted the development of many poor countries. The consensus in the literature remains that external debt promotes growth to the extent that a country does not exceed its debt carrying capacity. Otherwise, additional debt accumulation would serve as a tax on future investment returns capable of creating disincentive to invest in the highly indebted countries. In the light of these arguments, this study investigated the possible role of domestic investment in the non-linear relation between external debt and economic growth in Nigeria over the period from 1981 to 2015. Based on the results of threshold regression analysis employed in this study, the overall findings showed that the impact of external debt on economic growth is sensitive to both measures of external debt used, and whether or not the role of domestic investment is accounted for. Specifically, this study confirmed the existence of the debt Laffer curve associated with the debt overhang theory arising from excessive external debt accumulation. Similarly, empirical support was obtained for the crowding-out effect of excessive external debt servicing. Also, accounting for the role of domestic investment in the non-linear relation between external debt and economic growth reduces the optimal debt carrying capacity of the country. It is therefore suggested that the Nigerian government internalizes a maximum ceiling of 6.81% as the share of external debt stock in gross national income (GNI) so as to enjoy the resulting growth benefits. External debt financing sources that are free of interest charge could also be explored so as to circumvent the burden imposed by excessive external debt servicing.
Policy rules as one of the most acceptable methods in monetary policies is among the significant characteristics of researches about policy making. A policy rule states how the policy tools should react to changes in the economic situations. Understanding the tools and criteria of monetary policies such as changes in target inflation, changes in relative weights of prices stability and employment, and its effect on different sections of society including households and economic firms can help economic policy makers to increase the effectiveness of monetary policies. This paper studies the time consistency and structure of optimal monetary policy from the viewpoint of public sector finance with respect to heterogeneous behavior of economic agents in form of keeping liquidity and nominal assets in Iran. The study utilizes time series data on a quarterly basis from Q1 1989 to Q4 2017. A new Keynesian dynamic stochastic general equilibrium (DSGE) models have been developed for monetary policy analysis in open economies. Results shows that the redistribution effect of monetary policy leads to breakage of the link between time consistency and high inflation; a characteristic that belongs to optimal monetary and fiscal policies.
