سید حسین میرجلیلی

The positive impacts of fiscal policy could be undermined when accompanied by uncertainty. We examined the effect of fiscal policy uncertainty on economic activities in the provinces of Iran. It includes production, investment, unemployment, and economic participation of the active workforce in these provinces, taking into account the effects of economic sanctions imposed on the economy. We employed two types of shocks: fiscal level shock (representing fiscal policy) and its volatility shock (as fiscal policy uncertainty), which derived from a specified fiscal reaction function. We estimated a Panel VAR model using provincial data from 2003 to 2020. The results of the impulse response function indicated that following the impulse in the fiscal policy uncertainty, the response shows an increase in the unemployment rate in the short run, a decrease in the capital investment, and an increase in the inflation rate in the short and medium terms. In the medium and long term, the response indicates a decrease in GDP growth and a reduction in the economic participation rate of the active workforce.

In Iran, especially in the aftermath of economic sanctions of the 2010s, and the intensification of the government's budget deficit, since 2012, there was a diminishing investment, followed by a decrease in production which led to stagnation in the economy. The government plays its economic role by implementing fiscal policy. However, when it is associated with uncertainty, the effectiveness of fiscal policy may be undermined. Therefore, we need to measure the uncertainty of fiscal policy in Iran. We measured the uncertainty index of fiscal policy in Iran using a specified fiscal reaction function. In this function, there are two types of shocks. First, fiscal level shock and second, volatility shock which is a proxy for fiscal policy uncertainty. To this end, we employ particle-filter to estimate fiscal policy uncertainty in Iran. In this paper, by measuring the structural budget balance function for Iran, we utilize it as a dependent variable. The results indicate that the trend of balance or total budget deficit has a compliance with the trend of balance or structural budget deficit for Iran suggesting that the nature of government budget in Iran is a structural one, and in the 2010s the sanctions, adversely affected on the government budget. In 2012, the intensification of sanctions led to the increase in the uncertainty of fiscal policy until 2015 that the trend of fiscal policy uncertainty was mildly downward. In 2017, the uncertainty index of Iran's fiscal policy has increased rapidly until it reached its maximum in 2020, in which the economy did not face with such uncertainty for fiscal policy since 1979.

Providing financial services for social projects represents corporate social responsibility (CSR), because it indicates ethical commitment for creating better social environment. It improves public image and loyalty of customers, increases the commercial value of the trademark, promote public trust, create confidence of the beneficiaries, and attract valuable resources by the corporate. Corporates have realized that they are responsible for the society in which they operate. We examined the impact of CSR on the efficiency and profitability of banks. The statistical population of the research is 16 banks listed in Tehran Stock Exchange during the period 2014-2018. Four variables represent efficiency and profitability. Also, six variables included in the model as control variables. The results indicated a positive and significant effect of social responsibility on the efficiency and profitability of the banks, so that the CSR has most effect on the return on assets, net profit margin and return on equity respectively.

Financing decisions such as capital structure have gained much attention in literature of financial development over the last decade. Capital structure deviations from its optimal level can occur for various reasons. According to the dynamic trade-off theory, continuous adjustment of capital structure to maximize company value is essential. If companies adjust their capital structure quickly towards the target leverage, past financing activities and historical market conditions will only have short-term effects on the current capital structure. Conversely, if companies adjust their capital structure slowly, the opposite is true. We examine the relationship between organizational and performance characteristics and capital structure, as well as the speed of adjustment, in financial and non-financial firms listed on the Tehran Stock Exchange and compare these effects between the two categories of companies. The statistical population consists of companies listed on the Tehran Stock Exchange from 2017 to 2022. The results show that the speed of capital structure adjustment is lower in the financial sector compared to the non-financial sector. Additionally, three performance variables—profitability, growth opportunities, and liquidity—are statistically significant and impact capital structure and its adjustment speed in both financial and non-financial sectors. However, the growth opportunities variable has a different effect direction in the financial sector compared to the non-financial sector, while the age variable does not have a significant effect. Regarding organizational characteristics—complexity, institutional ownership, and size—only organizational complexity in the financial sector is significant at a 95% confidence level, while all organizational characteristics are significant in the non-financial sector

Financial sanctions have economic consequences for the oil-dependent economies. We examined the impact of financial sanctions on exchange rate fluctuations and macroeconomic variables in Iran. To this end, we employed a new Keynesian DSGE model. The results indicated that with the shock in foreign exchange, production (Y) and imports initially decreased. Oil production has shown a positive reaction initially and a negative reaction in the medium term, and after 7 periods, the effect of the shock has disappeared. The capital stock (K) also decreased initially, and in two periods, it reacted positively. In the tenth period, its effect disappeared, and in the long term, it became partially negative, and its effect disappeared. The inflation rate has decreased initially, and its effect disappeared over time. Consumption decreased, and after five cycles, the reaction became positive and then disappeared. The interest rate increased initially and then decreased, and in the 10th period, the shock effect disappeared. The exchange rate initially decreased and then increased after one period.

Financial sanctions have many economic consequences for the oil exporting economies. The sanctioned economy adopts economic policies to deal with it. This paper examines the relationship between financial sanctions, oil revenues and monetary and fiscal policies in Iran and explicates how financial sanctions have affected Iran's access to oil revenues. It also examines the role of fiscal and monetary policies in financial stability and resilience in Iran's economy. To this end, we employed a DSGE model with the new Keynesian approach. The results indicate that the interest rate, consumption, imports and inflation have a positive reaction to the oil revenue shock resulting from financial sanctions. However, the production, export, private sector investment and oil sales indicate a negative reaction to the oil revenues’ shock. Regarding the monetary policy shock, the reaction of production and consumption to the shock is positive. However, the reaction of oil sales and interest rate to this shock is negative. In terms of financial policy shock, production, consumption, investment and export indicated a positive reaction to this shock. However, the interest rate, imports and oil sales indicated a negative reaction to the fiscal policy shock. Monetary and fiscal policy shocks increase the effect of financial sanctions for a short period, while monetary policy shock has reduced the effect of financial sanctions for three periods. Therefore, monetary policy has been more effective than fiscal policy in reducing the effect of financial sanctions.