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A Statistical Analysis of the Effect of Fiscal Policies on Employment in Iran

Sara Rezaqolipurnajafzadeh, Marjan Damankeshideh, Alireza Daghighiasli

Abstract



Fiscal policies affect real economic variables and this paper examines those short and long term effects on employment rate in Iran over the period of 1986 to 2014 by applying ARDL method. The results indicate current and construction expenditures increase employment. Moreover tax and real interest rate have a negative effect on employment in short and long terms. The coefficient of error-correction term shows that long-term imbalances will be adjusted to the size of 61 percent in each period.

Keywords


Fiscal policy, employment rate, current and construction expenditures, tax, real interest rate.

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