University of TabrizApplied Theories of Economics2423-658613120260321Examining the Impact of Inbound Green Foreign Direct Investment on Entrepreneurship in Iran Using Fuzzy RegressionExamining the Impact of Inbound Green Foreign Direct Investment on Entrepreneurship in Iran Using Fuzzy Regression1302038410.22034/ecoj.2025.63894.3356FAKazemAbedzadehPh.D. Candidate in Economics, Economics Department, Faculty of Economics and Management, University of Tabriz, Tabriz, IranBehzadSalmaniProfessor of Economics, Economics Department, Faculty of Economics and Management, University of Tabriz, Tabriz, IranMohamad RezaSalmani BishakAssociate Professor of Economics, Economics Department, Faculty of Economics and Management, University of Tabriz, Tabriz, Iran0000-0002-9585-2710Journal Article20241008The present study was conducted with the primary objective of examining the effect of green foreign direct investment (FDI) on entrepreneurial activities in Iran. To achieve this goal, data from the period 2008–2022 were utilized. Given the significant scarcity of accessible and published data on entrepreneurship, the fuzzy regression method was selected as an appropriate tool for data analysis and model estimation. The results of the study indicated that green FDI has had a negative impact on entrepreneurship in Iran. Additionally, the research data showed that certain factors, such as gross domestic product growth, entrepreneurial motivation and willingness, government support, macroeconomic policies, and risk acceptance, played positive roles in fostering entrepreneurship. In contrast, factors such as high tax rates, complexities in bureaucratic structures, and excessive openness of the domestic market were considered obstacles that negatively affected entrepreneurial growth. The negative impact of green FDI on entrepreneurship can be attributed to several key reasons, including the occupation of a significant portion of market capacity by foreign investors, increased competition intensity, and the creation of additional barriers to market entry for local entrepreneurs. These conditions have reduced motivation and limited growth opportunities for domestic entrepreneurs, ultimately acting as a deterrent to the promotion of entrepreneurial activitiesThe present study was conducted with the primary objective of examining the effect of green foreign direct investment (FDI) on entrepreneurial activities in Iran. To achieve this goal, data from the period 2008–2022 were utilized. Given the significant scarcity of accessible and published data on entrepreneurship, the fuzzy regression method was selected as an appropriate tool for data analysis and model estimation. The results of the study indicated that green FDI has had a negative impact on entrepreneurship in Iran. Additionally, the research data showed that certain factors, such as gross domestic product growth, entrepreneurial motivation and willingness, government support, macroeconomic policies, and risk acceptance, played positive roles in fostering entrepreneurship. In contrast, factors such as high tax rates, complexities in bureaucratic structures, and excessive openness of the domestic market were considered obstacles that negatively affected entrepreneurial growth. The negative impact of green FDI on entrepreneurship can be attributed to several key reasons, including the occupation of a significant portion of market capacity by foreign investors, increased competition intensity, and the creation of additional barriers to market entry for local entrepreneurs. These conditions have reduced motivation and limited growth opportunities for domestic entrepreneurs, ultimately acting as a deterrent to the promotion of entrepreneurial activitieshttps://ecoj.tabrizu.ac.ir/article_20384_623336367521c5f18a9a40b6d9cbd098.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Financial Development and Environmental Quality in OPEC countries, Emphasizing the Role of Population, Affluence and TechnologyFinancial Development and Environmental Quality in OPEC countries, Emphasizing the Role of Population, Affluence and Technology31602048010.22034/ecoj.2025.64788.3375FAMohammadAsadiPh. D Candidate, Department of Economics, Ur.C., Islamic Azad University, Urmia, Iran.ElnazEntezarAssistant Professor, Department of Economics, Ur.C., Islamic Azad University, Urmia, IranSeyedhossienSajadifarAssistant Professor, Department of Management, Science and Technology of Amirkabir University of Technology, TehranTaherehAkhoondzadehAssistant Professor, Department of Economics, Ur.C., Islamic Azad University, Urmia, IranJournal Article20241224A healthy environment is a cornerstone of sustainable development and plays a vital role in both quality of life and economic growth. Within this framework, financial development emerges as a double-edged factor: while it can enhance environmental quality by facilitating investment in clean technologies and improving resource efficiency, it may simultaneously undermine it by driving higher energy consumption and pollutant emissions. This study examines the relationship between financial development and environmental quality, with a particular focus on the roles of technology, population, and resource abundance. Environmental quality is assessed using two indicators—carbon dioxide emissions and the ecological footprint—while energy intensity is employed as a proxy for technology. The analysis utilizes data from 11 OPEC member countries over the period 1990–2018, applying the Augmented Mean Group (AMG) estimator and the STRIPAT model. The results reveal that financial development increases carbon dioxide emissions and the ecological footprint, with coefficients of 0.106 and 0.093 respectively, thereby deteriorating environmental quality. Furthermore, greater energy intensity, as a proxy for technology, is found to reduce environmental quality, while population growth and affluence exert similarly adverse effects. Causality tests confirm a bidirectional relationship between financial development and environmental quality. These findings suggest that OPEC member countries can improve their environmental performance through investment in clean technologies and by reducing energy intensity.A healthy environment is a cornerstone of sustainable development and plays a vital role in both quality of life and economic growth. Within this framework, financial development emerges as a double-edged factor: while it can enhance environmental quality by facilitating investment in clean technologies and improving resource efficiency, it may simultaneously undermine it by driving higher energy consumption and pollutant emissions. This study examines the relationship between financial development and environmental quality, with a particular focus on the roles of technology, population, and resource abundance. Environmental quality is assessed using two indicators—carbon dioxide emissions and the ecological footprint—while energy intensity is employed as a proxy for technology. The analysis utilizes data from 11 OPEC member countries over the period 1990–2018, applying the Augmented Mean Group (AMG) estimator and the STRIPAT model. The results reveal that financial development increases carbon dioxide emissions and the ecological footprint, with coefficients of 0.106 and 0.093 respectively, thereby deteriorating environmental quality. Furthermore, greater energy intensity, as a proxy for technology, is found to reduce environmental quality, while population growth and affluence exert similarly adverse effects. Causality tests confirm a bidirectional relationship between financial development and environmental quality. These findings suggest that OPEC member countries can improve their environmental performance through investment in clean technologies and by reducing energy intensity.https://ecoj.tabrizu.ac.ir/article_20480_3a42c78a6939b3c979946f5c056dbe1b.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Analyzing the Impact of Banking Imbalance on Economic Welfare in IranAnalyzing the Impact of Banking Imbalance on Economic Welfare in Iran61882024410.22034/ecoj.2025.65186.3386FAShahriarZerokiAssociate Professor in Energy Economics, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, IranSaharNasrnejad NesheliPhD. Student in Economics, Faculty of Economics, University of Allameh Tabatabai, Tehran, IranFatemehHajitabarPhD. Student in Economics, Faculty of Economics, University of Allameh Tabatabai, Tehran, IranJournal Article20250108Given the economy’s dependence on banks as the primary source of corporate financing, the performance of the banking system significantly affects the broader economy. Banking system performance is typically assessed through its balance sheet. This study examines the reality that when this crucial financial statement becomes imbalanced, how economic welfare is affected.
Considering the importance of this issue, the present study employs the Autoregressive Distributed Lag (ARDL) approach to estimate the impact of banking imbalance on economic welfare over the period 1978–2022 in two frameworks. In the first framework, bank debt growth to the central bank is used as an indicator of banking imbalance, while in the second framework, government debt growth to the central bank is employed to strengthen the robustness of the results. The composite economic welfare index is used to measure economic welfare.
The movement of the economic welfare index indicates that during the study period, it fluctuated around an average of 40.26. Similarly, the growth of bank debt to the central bank and government debt to the central bank showed fluctuations, with averages of 1.29 and -3.56, respectively. Long-term estimation results indicate that banking imbalance (based on both indicators) has a negative effect on economic welfare. Additionally, per capita income and economic growth have positive effects, while inflation has a negative impact on economic welfare.
<strong> </strong>Based on the results, ensuring the stability and soundness of bank balance sheets is crucial for maintaining economic stability, promoting sustainable growth, and ultimately enhancing economic welfare. Therefore, it is recommended that measures to reduce banking imbalance be implemented, such as reforming the banking system, converting non-productive bank assets into securities, preventing the transformation of banks’ overdrafts into credit<strong> </strong>lines, reducing mandatory lending, and ensuring adequate bank capital.Given the economy’s dependence on banks as the primary source of corporate financing, the performance of the banking system significantly affects the broader economy. Banking system performance is typically assessed through its balance sheet. This study examines the reality that when this crucial financial statement becomes imbalanced, how economic welfare is affected.
Considering the importance of this issue, the present study employs the Autoregressive Distributed Lag (ARDL) approach to estimate the impact of banking imbalance on economic welfare over the period 1978–2022 in two frameworks. In the first framework, bank debt growth to the central bank is used as an indicator of banking imbalance, while in the second framework, government debt growth to the central bank is employed to strengthen the robustness of the results. The composite economic welfare index is used to measure economic welfare.
The movement of the economic welfare index indicates that during the study period, it fluctuated around an average of 40.26. Similarly, the growth of bank debt to the central bank and government debt to the central bank showed fluctuations, with averages of 1.29 and -3.56, respectively. Long-term estimation results indicate that banking imbalance (based on both indicators) has a negative effect on economic welfare. Additionally, per capita income and economic growth have positive effects, while inflation has a negative impact on economic welfare.
<strong> </strong>Based on the results, ensuring the stability and soundness of bank balance sheets is crucial for maintaining economic stability, promoting sustainable growth, and ultimately enhancing economic welfare. Therefore, it is recommended that measures to reduce banking imbalance be implemented, such as reforming the banking system, converting non-productive bank assets into securities, preventing the transformation of banks’ overdrafts into credit<strong> </strong>lines, reducing mandatory lending, and ensuring adequate bank capital.https://ecoj.tabrizu.ac.ir/article_20244_ead86f25a3325a3b1e4fb0783a8d8414.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Examining the Impact of Economic Sanctions and Exchange Rate Fluctuations on Iran’s ImportsExamining the Impact of Economic Sanctions and Exchange Rate Fluctuations on Iran’s Imports891102093110.22034/ecoj.2025.66577.3417FAMostafaShokriAssistant Professor, Department of Economics, Faculty of Management and Economics, Lorestan University, Khorramabad, Iran0009-0004-6092-1925KobraFarhadiPhD student in Monetary Economics, Alzahra University, Tehran, Iran.Journal Article20250409Economic sanctions against Iran have inevitably affected the national currency value and the flow of international trade. At the same time, sanctions have influenced public expectations, contributing to increased exchange rate volatility. Recognizing the significance of these factors, the present study aims to examine the impact of economic sanctions and exchange rate fluctuations on Iran’s imports over the period 1991–2023. This study contains two key innovations. First, it categorizes the sanctions imposed on Iran’s economy into three levels of intensity: mild, moderate, and strong. Second, because multiple visible and invisible factors can affect a country’s imports, a fuzzy regression model is employed to fit the data and capture these complexities. The findings indicate that increasing exchange rate volatility raises transaction risks for importers, which in turn reduces the volume of imported goods. Additionally, the fuzzy coefficients of the dummy variables for sanctions show that the imposition of sanctions, besides limiting the inflow of goods and services, increases the total cost of imported goods. As a result, the ratio of imports to Iran’s GDP has experienced a significant decline. Furthermore, a comparison of the symmetric triangular fuzzy coefficients in the model suggests that the primary barrier to imports in Iran is high-intensity sanctions. These strong sanctions act as a substantial obstacle, overshadowing other factors and sharply reducing the inflow of goods and services.Economic sanctions against Iran have inevitably affected the national currency value and the flow of international trade. At the same time, sanctions have influenced public expectations, contributing to increased exchange rate volatility. Recognizing the significance of these factors, the present study aims to examine the impact of economic sanctions and exchange rate fluctuations on Iran’s imports over the period 1991–2023. This study contains two key innovations. First, it categorizes the sanctions imposed on Iran’s economy into three levels of intensity: mild, moderate, and strong. Second, because multiple visible and invisible factors can affect a country’s imports, a fuzzy regression model is employed to fit the data and capture these complexities. The findings indicate that increasing exchange rate volatility raises transaction risks for importers, which in turn reduces the volume of imported goods. Additionally, the fuzzy coefficients of the dummy variables for sanctions show that the imposition of sanctions, besides limiting the inflow of goods and services, increases the total cost of imported goods. As a result, the ratio of imports to Iran’s GDP has experienced a significant decline. Furthermore, a comparison of the symmetric triangular fuzzy coefficients in the model suggests that the primary barrier to imports in Iran is high-intensity sanctions. These strong sanctions act as a substantial obstacle, overshadowing other factors and sharply reducing the inflow of goods and services.https://ecoj.tabrizu.ac.ir/article_20931_8c07d597b6f79b043c2ab38009bb6955.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Identification of Drivers and Plausible Scenarios in the Environmental Governance of Tabriz MetropolisIdentification of Drivers and Plausible Scenarios in the Environmental Governance of Tabriz Metropolis1111462059110.22034/ecoj.2025.67491.3432FAZahraAzariGraduated from Institutional Economics, Faculty of Economics and Management, University of Tabriz, Tabriz, IranRezaKanooniPhD student in Geography and Urban Planning, University of Tehran, Tehran, IranZeinabBaradaranGraduated from Urban Economics, Faculty of Economics and Management, University of Tabriz, Tabriz, IranHoseinAsgharpourProfessor of Economics, Faculty of Economics and Management, University of Tabriz, Tabriz, IranJournal Article20250528Urban environmental governance, as a complex and multidimensional domain, requires a profound understanding of the interactions among various actors, institutional structures, and decision-making processes. Urban environmental governance is both a practical and strategic necessity for achieving sustainable development and ensuring the health and well-being of citizens. The present study was conducted to structurally analyze urban environmental governance through a futures studies approach (monitoring the past and present to understand the future) and scenario planning in the metropolis of Tabriz. Methodologically, this research is analytical and exploratory, based on futures studies methods, and is applied in terms of purpose. Data collection was conducted through documentary methods in the theoretical section and through a Delphi survey in the practical section. Data analysis was performed using MICMAC and Scenario Wizard software. The MICMAC output indicated system instability. The variables and factors influencing environmental governance in Tabriz metropolis were categorized into seven components and forty-seven variables. Using MICMAC software, fifteen key factors were identified and, along with forty-nine states, entered into the Scenario Wizard. Scenario Wizard analyses, out of a total of 10,004 possible scenarios, produced seven highly consistent and plausible scenarios. Approximately 57 of the forthcoming conditions for the future of urban environmental governance in Tabriz metropolis indicate a desirable state. Updating and enacting environmental laws and regulations in Tabriz, establishing a Supreme Council for Urban Environment, integrated urban management and planning, planning to address environmental crises, and incorporating environmental policymaking into urban planning are among the most significant key factors influencing the future state of urban environmental governance in the Tabriz metropolis.Urban environmental governance, as a complex and multidimensional domain, requires a profound understanding of the interactions among various actors, institutional structures, and decision-making processes. Urban environmental governance is both a practical and strategic necessity for achieving sustainable development and ensuring the health and well-being of citizens. The present study was conducted to structurally analyze urban environmental governance through a futures studies approach (monitoring the past and present to understand the future) and scenario planning in the metropolis of Tabriz. Methodologically, this research is analytical and exploratory, based on futures studies methods, and is applied in terms of purpose. Data collection was conducted through documentary methods in the theoretical section and through a Delphi survey in the practical section. Data analysis was performed using MICMAC and Scenario Wizard software. The MICMAC output indicated system instability. The variables and factors influencing environmental governance in Tabriz metropolis were categorized into seven components and forty-seven variables. Using MICMAC software, fifteen key factors were identified and, along with forty-nine states, entered into the Scenario Wizard. Scenario Wizard analyses, out of a total of 10,004 possible scenarios, produced seven highly consistent and plausible scenarios. Approximately 57 of the forthcoming conditions for the future of urban environmental governance in Tabriz metropolis indicate a desirable state. Updating and enacting environmental laws and regulations in Tabriz, establishing a Supreme Council for Urban Environment, integrated urban management and planning, planning to address environmental crises, and incorporating environmental policymaking into urban planning are among the most significant key factors influencing the future state of urban environmental governance in the Tabriz metropolis.https://ecoj.tabrizu.ac.ir/article_20591_3200ec6ad2a3e678d67dbfb69edca6a7.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Central Bank Exchange Rate Management in Line with Clause 2 of the General Policies of the Seventh Development Plan under Economic Sanctions: A DSGE ApproachCentral Bank Exchange Rate Management in Line with Clause 2 of the General Policies of the Seventh Development Plan under Economic Sanctions: A DSGE Approach1471762049610.22034/ecoj.2025.67575.3436FAFaridehKhodadadiAssistant Professor, Department of Economics, Faculty of Economics and Political Science, Shahid Beheshti University, Tehran, IranSeyyed RezaNakhliAssistant Professor, Department of Economics, Faculty of Governance, University of Tehran, Tehran, Iran0000-0002-1537-0675Journal Article20250529Given the widespread use of economic sanctions and the introduction of new sanction regimes since the early 2010s, as well as the potential application of a “maximum pressure” policy during Trump’s second administration as a tool for economic-political leverage, this study seeks to provide a framework for evaluating the Central Bank’s exchange rate management in line with Clause 2 of the general policies of the Seventh Development Plan under economic sanctions. For this purpose, a DSGE approach with a Neo-Keynesian perspective is employed to simulate the impact of oil and financial sanctions on Iran’s economy over the period 1991–2024. The focal point of this research is the application of optimal monetary policies aimed at minimizing the Central Bank’s losses under sanction conditions. Simulation results indicate that implementing optimal monetary policies, with a focus on controlling inflation and reducing the output gap, can significantly mitigate the Central Bank’s losses under intensified oil and financial sanctions. This approach is efficient when emphasizing inflation control through exchange rate market management, stabilizing the exchange rate (and consequently, inflation), and alleviating pressures on domestic production inputs, in accordance with Clause 2 of the general policies outlined in the Seventh Development Plan.Given the widespread use of economic sanctions and the introduction of new sanction regimes since the early 2010s, as well as the potential application of a “maximum pressure” policy during Trump’s second administration as a tool for economic-political leverage, this study seeks to provide a framework for evaluating the Central Bank’s exchange rate management in line with Clause 2 of the general policies of the Seventh Development Plan under economic sanctions. For this purpose, a DSGE approach with a Neo-Keynesian perspective is employed to simulate the impact of oil and financial sanctions on Iran’s economy over the period 1991–2024. The focal point of this research is the application of optimal monetary policies aimed at minimizing the Central Bank’s losses under sanction conditions. Simulation results indicate that implementing optimal monetary policies, with a focus on controlling inflation and reducing the output gap, can significantly mitigate the Central Bank’s losses under intensified oil and financial sanctions. This approach is efficient when emphasizing inflation control through exchange rate market management, stabilizing the exchange rate (and consequently, inflation), and alleviating pressures on domestic production inputs, in accordance with Clause 2 of the general policies outlined in the Seventh Development Plan.https://ecoj.tabrizu.ac.ir/article_20496_b38b0f9160971a06cfee4fcd1a0bf2a0.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Short-Term and Long-Term Response of Stock Returns of Export and Import Industries to Monetary Policy in Tehran Stock ExchangeShort-Term and Long-Term Response of Stock Returns of Export and Import Industries to Monetary Policy in Tehran Stock Exchange1772002061510.22034/ecoj.2025.68135.3440FASeyed HassanMasoudi AlaviPhD in Finance-Engineering, Department of Financial Management and Accounting, Faculty of Management and Accounting, Farabi Colleges, University of Tehran, IranMohammadNadiriAssociate Professor, Department of Financial Management and Accounting, Faculty of Management and Accounting, Farabi College, University of Tehran, IranMohammad MahdiFotouhi RashidiPhD in Finance, Department of Financial Management and Accounting, Faculty of Management and Accounting, Farabi College, University of Tehran,, IranJournal Article20250713Exchange rate fluctuations and monetary policy changes affect stock market returns through channels such as the cost of capital, credit, and exchange rates. Understanding the distinction between these effects, especially during economic sanctions, is of great importance to policymakers and investors. Accordingly, the present study examines the effect of monetary policy on the stock returns of 9 export industries and eight import industries, as well as the total of these industries on the Tehran Stock Exchange, during the monthly period from April 2010 to March 2023. For this purpose, monetary policy was measured using the monetary conditions index derived from a principal component analysis (PCA), and liquidity volume, oil price, and interest rate were included as control variables. The estimation of short-run and long-run relationships was carried out using the pooled group mean (PMG) method. The results showed that in the long run, monetary policy has a positive and significant effect on the returns of export industries and on the total of industries. In contrast, no effect was observed for import industries. No direct effect was reported in the short run. However, the error-correction coefficients indicated that export, import, and total industries return to long-run equilibrium at rates of 84, 74, and 80 percent, respectively. These findings highlight the dominant role of export industries in the Iranian capital market. Therefore, it is suggested that investors should focus more on export industries under expansionary monetary policy conditions, and that policymakers should reduce the potential adverse effects on import industries and enhance the stability of economic actors’ expectations by managing the exchange rate and interest rates.Exchange rate fluctuations and monetary policy changes affect stock market returns through channels such as the cost of capital, credit, and exchange rates. Understanding the distinction between these effects, especially during economic sanctions, is of great importance to policymakers and investors. Accordingly, the present study examines the effect of monetary policy on the stock returns of 9 export industries and eight import industries, as well as the total of these industries on the Tehran Stock Exchange, during the monthly period from April 2010 to March 2023. For this purpose, monetary policy was measured using the monetary conditions index derived from a principal component analysis (PCA), and liquidity volume, oil price, and interest rate were included as control variables. The estimation of short-run and long-run relationships was carried out using the pooled group mean (PMG) method. The results showed that in the long run, monetary policy has a positive and significant effect on the returns of export industries and on the total of industries. In contrast, no effect was observed for import industries. No direct effect was reported in the short run. However, the error-correction coefficients indicated that export, import, and total industries return to long-run equilibrium at rates of 84, 74, and 80 percent, respectively. These findings highlight the dominant role of export industries in the Iranian capital market. Therefore, it is suggested that investors should focus more on export industries under expansionary monetary policy conditions, and that policymakers should reduce the potential adverse effects on import industries and enhance the stability of economic actors’ expectations by managing the exchange rate and interest rates.https://ecoj.tabrizu.ac.ir/article_20615_709e2272d95100114d03be269d841755.pdfUniversity of TabrizApplied Theories of Economics2423-658613120260321Multiple Modeling of the Asymmetric Effects of Government Size on Iran's Economic Growth: A Dynamic Threshold ApproachMultiple Modeling of the Asymmetric Effects of Government Size on Iran's Economic Growth: A Dynamic Threshold Approach2012302094910.22034/ecoj.2025.69348.3459FAFarhadVafaee SedehiDepartment of Economics, Shi.C., Islamic Azad University, Shiraz, IranMehrzadEbrahimiDepartment of Economics, Shi.C., Islamic Azad University, Shiraz, IranHashemZareDepartment of Economics, Shi.C., Islamic Azad University, Shiraz, IranJournal Article20251002The purpose of this research is to examine how government spending shocks affect Iran's economic growth.To achieve this goal, multivariate modeling of Ram's (1986) growth patterns and Hansen's threshold regression method have been used. The threshold criteria used in this study for government size are: the ratio of government current expenditures to GDP (GS1) and the ratio of government capital asset acquisition costs to GDP (GS2). The findings of this study confirm the positive effect of government spending shocks on capital asset acquisition costs and their lack of confirmation in the area of current spending on Iran's economic growth. Also, the results indicate that the Bars (Army) curve has not been realized in the Iranian economy during the period 1961 to 2023; meaning that in none of the small, medium, and large government sizes, the relationship between government size and economic growth is negative, and we do not witness an inverted U curve in this relationship. However, this effect is faced with a decrease in efficiency and effectiveness in large government sizes. The positive side effects of government spending in the areas of current spending and capital asset acquisition on non-government sector production are another finding of this study, which is faced with a decrease in elasticity in the current spending sector from small to large government and an increase in elasticity in the capital asset acquisition sector.The purpose of this research is to examine how government spending shocks affect Iran's economic growth.To achieve this goal, multivariate modeling of Ram's (1986) growth patterns and Hansen's threshold regression method have been used. The threshold criteria used in this study for government size are: the ratio of government current expenditures to GDP (GS1) and the ratio of government capital asset acquisition costs to GDP (GS2). The findings of this study confirm the positive effect of government spending shocks on capital asset acquisition costs and their lack of confirmation in the area of current spending on Iran's economic growth. Also, the results indicate that the Bars (Army) curve has not been realized in the Iranian economy during the period 1961 to 2023; meaning that in none of the small, medium, and large government sizes, the relationship between government size and economic growth is negative, and we do not witness an inverted U curve in this relationship. However, this effect is faced with a decrease in efficiency and effectiveness in large government sizes. The positive side effects of government spending in the areas of current spending and capital asset acquisition on non-government sector production are another finding of this study, which is faced with a decrease in elasticity in the current spending sector from small to large government and an increase in elasticity in the capital asset acquisition sector.https://ecoj.tabrizu.ac.ir/article_20949_5caf1dd84f086484cab74495bb1b7ce8.pdf