University of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120Investigation of Profit-Loss Sharing and Fixed-Return Contracts Recovery Rate Using Game Theory ApproachInvestigation of Profit-Loss Sharing and Fixed-Return Contracts Recovery Rate Using Game Theory Approach1205785FAShokoofeh SadatAshrafzadehPh.D. Candidates in Economics, Ferdowsi University of Mashhad (International Campus)Seyyed Mohammad JavadRazmiAssociate Professor of Economics, Ferdowsi University of MashhadMohammad RezaLotfalipourProfessor of Economics, Ferdowsi University of MashhadMehdiFeiziAssistant professor of Economics, Ferdowsi University of MashhadJournal Article20170214In loan contracts with profit-loss sharing (PLS), both sides share not only its expected profit but they both have to bear its probable losses as well. But in fixed interest-based loan contracts, the bank is simply risk natural and transfer all contract risks to borrower. Although in Islamic Sharia only the former contracts are accepted, it is not used that much in practice. In words, common loan contracts even in Islamic countries do not comply with the Sharia. This paper, using a game theory model, attempts to compare profit of banks these two sort of contracts based on recovery rate of borrowers when we have not only adverse selection but also costly state verification. We show that Sharia-compliant contracts (e.g. PLS) have significantly higher recovery rate compared to fixed interest-based contracts. In loan contracts with profit-loss sharing (PLS), both sides share not only its expected profit but they both have to bear its probable losses as well. But in fixed interest-based loan contracts, the bank is simply risk natural and transfer all contract risks to borrower. Although in Islamic Sharia only the former contracts are accepted, it is not used that much in practice. In words, common loan contracts even in Islamic countries do not comply with the Sharia. This paper, using a game theory model, attempts to compare profit of banks these two sort of contracts based on recovery rate of borrowers when we have not only adverse selection but also costly state verification. We show that Sharia-compliant contracts (e.g. PLS) have significantly higher recovery rate compared to fixed interest-based contracts. https://ecoj.tabrizu.ac.ir/article_5785_41ae536a092ebcd901fb54f29f156ffc.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120The Desirable Pattern of Deposits in the Banking System of IranThe Desirable Pattern of Deposits in the Banking System of Iran21465786FAYaqobMahmodianPh.D. Candidates in Economics, Payam-e-Noor UniversityAsgharAbolhasani HastianiAssociate Professor of Economics, Payam-e-Noor UniversityMohammad HosseinPourkazemiAssociate Professor of Applied Mathematics, Shahid Beheshti UniversityKamranNadriAssistant Professor of Economics, Imam Sadiq UniversityJournal Article20170214The issue of resource mobilization and how it led to the efficient investment activities is the basic foundations of any economy is growing and developing. The banking system is considered the most important institution in this area and devoted himself a major part of the community funds. So need to design a comprehensive model bank operating in accordance with the terms of the community, seems essential. This study used dynamic stochastic optimization pattern, to maximize the net present value of bank profits by taking control variables (the share of each type of deposit) and considering three indicating stochastic inclusion of stochastic differential equation of lawyer in debt deposit, fixed contracts and participation contracts. Results collected from optimum levels of control and status variables shows increase efficiency and reduce costs of each type of deposit, leading to the increasing shift the optimal route, upward and through increased deposit, banks profit also increased. In order to improve performance, sharia compliance and transparency in the functioning of banks, the model presented in this study as a good model for Iranian banking system is suggested.The issue of resource mobilization and how it led to the efficient investment activities is the basic foundations of any economy is growing and developing. The banking system is considered the most important institution in this area and devoted himself a major part of the community funds. So need to design a comprehensive model bank operating in accordance with the terms of the community, seems essential. This study used dynamic stochastic optimization pattern, to maximize the net present value of bank profits by taking control variables (the share of each type of deposit) and considering three indicating stochastic inclusion of stochastic differential equation of lawyer in debt deposit, fixed contracts and participation contracts. Results collected from optimum levels of control and status variables shows increase efficiency and reduce costs of each type of deposit, leading to the increasing shift the optimal route, upward and through increased deposit, banks profit also increased. In order to improve performance, sharia compliance and transparency in the functioning of banks, the model presented in this study as a good model for Iranian banking system is suggested.https://ecoj.tabrizu.ac.ir/article_5786_8c6d57f6b402339a20064ebd01453ea7.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120The Impact of Economic Variables on Food Security in the Provinces of Iran: Measuring and ComparingThe Impact of Economic Variables on Food Security in the Provinces of Iran: Measuring and Comparing47765787FAFatemehBagherzadeh AzarPh.D. Candidate in Economics, University of TabrizRezaRanjpourAssociate Professor of Economics, University of TabrizZahraKarami TakanlouAssistant Professor of Economics, University of TabrizMohammad AliMotaffaker AzadProfessor of Economics, University of TabrizAhmadAssadzadehAssociate Professor of Economics, University of TabrizJournal Article20170214Food security has been a global problem and has attracted the attention of policy-maker and scientific circles. So, the purpose of this study is calculating food security in provinces and identifying variables that strengthen or stopping it. In this regard, first food security situation of the provinces of Iran during 2006-2013 are calculated with multi- sectoral index based on human development index. The result shows that on average provinces of Sistan and Baluchistan, Hormozgan and South Khorasan have worst food security situation and East Azerbaijan, Khorasan and Fars have the highest food security situation. Then examine the impact of economic factors on food security with Dynamic Panel Data method. The result suggests that economic growth index is a positive factor, urbanization and consumption price are negative factors in improving food security index. The result of Sensitivity analysis reinforces the same result. Food security has been a global problem and has attracted the attention of policy-maker and scientific circles. So, the purpose of this study is calculating food security in provinces and identifying variables that strengthen or stopping it. In this regard, first food security situation of the provinces of Iran during 2006-2013 are calculated with multi- sectoral index based on human development index. The result shows that on average provinces of Sistan and Baluchistan, Hormozgan and South Khorasan have worst food security situation and East Azerbaijan, Khorasan and Fars have the highest food security situation. Then examine the impact of economic factors on food security with Dynamic Panel Data method. The result suggests that economic growth index is a positive factor, urbanization and consumption price are negative factors in improving food security index. The result of Sensitivity analysis reinforces the same result. https://ecoj.tabrizu.ac.ir/article_5787_25a498610274040b8da45854d6eb50c7.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120An Investigation of Economic Factors Affecting Output Gap in the Iranian EconomyAn Investigation of Economic Factors Affecting Output Gap in the Iranian Economy771005794FASeyyed AbdolmajidJalaeeProfessor of Economics, Shahid Bahonar UniversityAlirezaShakibaeeAssociate Professor of Economics, Shahid Bahonar UniversityMehdiNejatiAssistant Professor of Economics, Shahid Bahonar UniversityMoslemAnsari NasabPh.D. Candidate in Economics, Shahid Bahonar UniversityJournal Article20170215Due to the importance of production in economy, its volatility affect economic sectors and agents significantly. Therefore, understanding the causes of business cycles is very important. Thus, this study extracted business cycles and investigated the effects of aggregate demand variables cycles in business cycle and the size of this effects in Iran’s economy over 1959-2014. For this purpose, first Hodrick-Prescott filter and then Markov-switching model are used to extract and examine the business cycles. The results showed asymmetry in the production cycles in Iran’s economy. The results of the regime of recession and expansion probability also revealed that although with less intensity, cycles of recession are more probable compared to expansion cycles, and have happened in longer period. Then, using the relevant indicators and Hsiao's causality tests, we focused on the relationship of demand side variables cycle with business cycles. The results indicated that the three variables including consumption, investment and government spending were all leading and coincident to business cycles. There was a two-way causality relationship between all three variables and the business cycles. However, balance of trade was found to be lagging and non-coincident to business cycles. It was also found that the causality runs only from balance of trade to business cycles.Due to the importance of production in economy, its volatility affect economic sectors and agents significantly. Therefore, understanding the causes of business cycles is very important. Thus, this study extracted business cycles and investigated the effects of aggregate demand variables cycles in business cycle and the size of this effects in Iran’s economy over 1959-2014. For this purpose, first Hodrick-Prescott filter and then Markov-switching model are used to extract and examine the business cycles. The results showed asymmetry in the production cycles in Iran’s economy. The results of the regime of recession and expansion probability also revealed that although with less intensity, cycles of recession are more probable compared to expansion cycles, and have happened in longer period. Then, using the relevant indicators and Hsiao's causality tests, we focused on the relationship of demand side variables cycle with business cycles. The results indicated that the three variables including consumption, investment and government spending were all leading and coincident to business cycles. There was a two-way causality relationship between all three variables and the business cycles. However, balance of trade was found to be lagging and non-coincident to business cycles. It was also found that the causality runs only from balance of trade to business cycles.https://ecoj.tabrizu.ac.ir/article_5794_c87c900f15cb5a738ef3c7e7eb1fa1f4.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120The Impact of Exchange Rate Pass-Through on Implicit Price Index of Iran's Agriculture Sector: An Application of M-GARCH and Threshold Regression ModelsThe Impact of Exchange Rate Pass-Through on Implicit Price Index of Iran's Agriculture Sector: An Application of M-GARCH and Threshold Regression Models1011285795FAMohammadAbdi SeyyedkolaeePh.D. Candidate in Economics, University of Mazandaran0000-0002-0528-7974AmirmansourTehranchianAssociate Professor of Economics, University of MazandaranAhmadJafari SamimiProfessor of Economics, University of Mazandaran0000-0002-9047-6189Seyyed MojtabaMojaverianAssociate Professor of Agricultural Economic, Sari University of Agricultural Sciences and Natural ResourcesJournal Article20170215The impact of exchange rate changes on prices called "Exchange Rate Pass-Through (ERPT)" is an important issue in economics. Changes in the exchange rate can affect agricultural product prices through the import prices of raw materials. Also, the dependency of the agricultural exports on the exchange rate can accelerate this relationship. Bearing in mind the strategic position of agricultural products, dealing with the above issue should be highly regarded by the agricultural sector policymakers. The purpose of the present paper is to study the impact of ERPT on the implicit price index of Iran's agriculture sector. It also deals with the possibility of any threshold value for the exchange rate from 1971-2014 .To do so, using time series data from the Central Bank of Iran, Multivariate Generalized Autoregressive Conditional Heteroskedasticity (M-GARCH) and Threshold Regression (TR) models have been estimated. The estimation results indicate that the past shocks of nominal exchange rate had a positive impact on the agriculture implicit price index. Also, the findings of the threshold regression estimation show that applying ERPT to implicit price index of agriculture products revealed a threshold value of 9226 Rials. In other words, an increase in the exchange rate higher than the threshold level will cause a much higher increase in the implicit price index of agriculture products in Iran.The impact of exchange rate changes on prices called "Exchange Rate Pass-Through (ERPT)" is an important issue in economics. Changes in the exchange rate can affect agricultural product prices through the import prices of raw materials. Also, the dependency of the agricultural exports on the exchange rate can accelerate this relationship. Bearing in mind the strategic position of agricultural products, dealing with the above issue should be highly regarded by the agricultural sector policymakers. The purpose of the present paper is to study the impact of ERPT on the implicit price index of Iran's agriculture sector. It also deals with the possibility of any threshold value for the exchange rate from 1971-2014 .To do so, using time series data from the Central Bank of Iran, Multivariate Generalized Autoregressive Conditional Heteroskedasticity (M-GARCH) and Threshold Regression (TR) models have been estimated. The estimation results indicate that the past shocks of nominal exchange rate had a positive impact on the agriculture implicit price index. Also, the findings of the threshold regression estimation show that applying ERPT to implicit price index of agriculture products revealed a threshold value of 9226 Rials. In other words, an increase in the exchange rate higher than the threshold level will cause a much higher increase in the implicit price index of agriculture products in Iran.https://ecoj.tabrizu.ac.ir/article_5795_00d85775d488c8d5390815eb3c347301.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120Analyzing of Oil Revenues Shocks Asymmetric Effects on Misery index in Iran Using Vector Error Correction ModelAnalyzing of Oil Revenues Shocks Asymmetric Effects on Misery index in Iran Using Vector Error Correction Model1291525796FAAzadKhanzadiAssistant Professor of Economics, Razi UniversitySaraMoradiM.A. In Economics, Razi UniversityMaryamHeidarianM.A. in Energy Economics, Razi UniversityJournal Article20160603Since the major part of oil revenues are control by government and it forms government’s expenditures; therefore, recognition of oil revenues growth shocks and their impacts intensity on macroeconomic variables such as inflation and unemployment is very important for economic policymakers. This study examines the asymmetric effects of oil revenues shocks on misery index in Iran’s economy by using vector error correction method. For this purpose, we use annual macroeconomic data during 1971-2014 periods. The result shows that both positive and negative shocks have a significant and negative effect on misery index and also long-term trend in oil revenues have a positive and significant relationship with misery index. On the other hand, population growth rate, government expenditure and trade openness index as well as influencing variables on misery index in the model were brought that have a positive and significant relationship with misery index. Also according to the Wald test results, the hypothesis of symmetric effects of positive and negative shocks of oil revenues is rejected.Since the major part of oil revenues are control by government and it forms government’s expenditures; therefore, recognition of oil revenues growth shocks and their impacts intensity on macroeconomic variables such as inflation and unemployment is very important for economic policymakers. This study examines the asymmetric effects of oil revenues shocks on misery index in Iran’s economy by using vector error correction method. For this purpose, we use annual macroeconomic data during 1971-2014 periods. The result shows that both positive and negative shocks have a significant and negative effect on misery index and also long-term trend in oil revenues have a positive and significant relationship with misery index. On the other hand, population growth rate, government expenditure and trade openness index as well as influencing variables on misery index in the model were brought that have a positive and significant relationship with misery index. Also according to the Wald test results, the hypothesis of symmetric effects of positive and negative shocks of oil revenues is rejected.https://ecoj.tabrizu.ac.ir/article_5796_a9d5b73acbabc52cac710e5e972b471b.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120The Impact of Monetary and Financial Freedom on Monetary Policy Transparency in Low, Middle and High Income CountriesThe Impact of Monetary and Financial Freedom on Monetary Policy Transparency in Low, Middle and High Income Countries1531765805FAOmidSattariPh.D. Candidate in Economics, Tarbiat Modares UniversityKazemYavariAssociate Professor of Economics , Tarbiat Modares UniversityHassanHeydariAssistant Professor of Economics, Tarbiat Modares UniversityMansourEtesamiAssistant Professor of Economics, Tarbiat Modares UniversityJournal Article20161012Theoretically speaking, monetary policy transparency refers to the informational symmetry between the central bank and the private sector. High degree of transparency reduces uncertainty, improves the private-sector inference about central bank goals, and increases the effectiveness of monetary policy. This study analyzes the impact of financial and monetary freedom on monetary policy transparency. A set of 102 countries -categorized in low, middle and high income groups have been investigated for the period 1998-2010, since the monetary policy transparency data are not available from 2010 onwards. The panel cointegation test suggests that the long run relationship between variables exists. The empirical findings suggest that while GDP per capita and trade freedom have a positive effect on transparency, the impact of financial freedom on transparency varieties in different income groups. Furthermore the monetary freedom exerts significant positive effect merely on middle income countries. These results imply that the reaction of monetary policy transparency to financial and monetary freedom might be depended to different economic structures.Theoretically speaking, monetary policy transparency refers to the informational symmetry between the central bank and the private sector. High degree of transparency reduces uncertainty, improves the private-sector inference about central bank goals, and increases the effectiveness of monetary policy. This study analyzes the impact of financial and monetary freedom on monetary policy transparency. A set of 102 countries -categorized in low, middle and high income groups have been investigated for the period 1998-2010, since the monetary policy transparency data are not available from 2010 onwards. The panel cointegation test suggests that the long run relationship between variables exists. The empirical findings suggest that while GDP per capita and trade freedom have a positive effect on transparency, the impact of financial freedom on transparency varieties in different income groups. Furthermore the monetary freedom exerts significant positive effect merely on middle income countries. These results imply that the reaction of monetary policy transparency to financial and monetary freedom might be depended to different economic structures.https://ecoj.tabrizu.ac.ir/article_5805_82d6189eaf0d061f87769ea2d4c8f441.pdfUniversity of TabrizQuarterly Journal of Applied Theories of Economics2423-65863420170120Investigation the Pass-Through of Global Food Prices to Domestic Prices in IranInvestigation the Pass-Through of Global Food Prices to Domestic Prices in Iran1771965806FAEbrahimJavdanPh. D. Candidate in Agricultural Economics, University of Tabriz0000-0001-9781-6521JafarHaghighatProfessor of Economics, University of TabrizEsmaeilPishbaharAssociate Professor of Agricultural Economics, University of TabrizRassulMohammadrezaeiAssociate Professor of Agricultural Economics, University of TabrizJournal Article20160622This paper investigates whether global food price shocks have been affected consumer price index in Iran. For this purpose, we estimate the pass-through of global food price inflation to domestic consumer price index using Markov Switching Vector Auto-Regressive (MS-VAR) and Vector Auto-Regressive (VAR) models and quarterly data from 1990:2 to 2015:1. With respect to the linearity test results, the MS-VAR model has better fit to data than linear VAR model. According to the information criteria statistics, the MSIAH(2)-VAR(1) specification is the chosen kind of MS-VAR model. The results show that the magnitude of global food prices pass-through to the consumer price index in the first and second regime is 0.05 and 0.35 after a year, respectively. Pass-through effect increases in second year that higher in second regime than first regime. The pass-through magnitude in first and second regime is 0.12 and 0.85 after two years, respectively. Because of substantial amount of agricultural inputs and food imports, the Iranian policymakers can limit the pass-through of global prices to domestic prices by applying the inflation targeting policies. This paper investigates whether global food price shocks have been affected consumer price index in Iran. For this purpose, we estimate the pass-through of global food price inflation to domestic consumer price index using Markov Switching Vector Auto-Regressive (MS-VAR) and Vector Auto-Regressive (VAR) models and quarterly data from 1990:2 to 2015:1. With respect to the linearity test results, the MS-VAR model has better fit to data than linear VAR model. According to the information criteria statistics, the MSIAH(2)-VAR(1) specification is the chosen kind of MS-VAR model. The results show that the magnitude of global food prices pass-through to the consumer price index in the first and second regime is 0.05 and 0.35 after a year, respectively. Pass-through effect increases in second year that higher in second regime than first regime. The pass-through magnitude in first and second regime is 0.12 and 0.85 after two years, respectively. Because of substantial amount of agricultural inputs and food imports, the Iranian policymakers can limit the pass-through of global prices to domestic prices by applying the inflation targeting policies. https://ecoj.tabrizu.ac.ir/article_5806_0417c7724dc89f70dec3158176f15388.pdf