Abstract
Abstract. This paper estimates the shares of Total Factor Productivity Growth (TFPG), labor accumulation, and capital stock accumulation in Iran’s economy, and analyzes the time trend of the TFPG over the course of 1360-1392 of the Solar Hijri calendar (approximately equal to the 1981-2013 of the Gregorian calendar). Few studies have already been carried out for estimating sources of economic growth in various countries and different economic sectors. Nevertheless, little attention has been paid to Iran’s economy in recent years. After testing for the stationarity of the variables using Dickey-Fuller tests, this study estimates an aggregate production function for Iran’s economy using times-series econometric methods. The results suggest that the production structure of Iran’s economy is more capital-intensive than being labor-intensive. In fact, the elasticities of production with respect to capital and labor have been 0.59 and 0.41, respectively. The findings show that the average annual growth rate of TFP has roughly been 0.5% over the study time period. The other results imply that the average contributions of TFPG, labor accumulation and capital accumulation in Iran’s economic growth have been 15%, 30%, and 55%, respectively. As a result, it could be inferred that the performance of Iran’s economy in terms of long-run, economy-wide productivity growth has been weak compared to that of other developed and developing countries, in most of which TFPG possesses relatively greater shares in their economic growth.
Keywords. Iran, Sources of economic growth, Aggregate production function, Capital accumulation, Employment.
JEL. O47.References
Alimoradi, L. (1382). Economy-Wide Total Factor Productivity and Its Share in Iran’s GDP Growth. Master’s Thesis. Alzahra University. Tehran, Iran.
Barro, R. (1998). Notes on Growth Accounting, NBER, Working Paper, No.6654. doi. 10.3386/w6654
Barro, R.J. (1999). Notes on growth accounting, Journal of Economic Growth, 4(2), 119-137. doi. 10.1023/A:1009828704275
Cenral Bank of Iran, (2016). Database of Economic Time Series. [Retrieved from].
Cobb, C.W., & Douglas P.H. (1928). A Theory of Production, American Economic Review, 18(1), 139-165.
Crafts, N. (2008). Solow and growth accounting: A perspective from quantitative economic history, Revised Draft of Paper for HOPE Conference, Duke University, April 2008.
Denison, E. (1979). Accounting for Slower Economic Growth 1929-1969, Washington D.C.: The Brookings Institution.
Jorgenson, D.W., & Griliches Z. (1967). The explanation of productivity change, The Review of Economic Studies, 34(3), 249-283.
Khadimee, M. (2016). The sources of long-run economic growth in Iran’s economy, Azad University of Iran, Master’s Thesis, Shiraz, Iran.
Kendrick, J.W. (1961). Productivity Trends in the United States, Princeton NJ, Princeton University Press.
Kim, J.I., & Lau, L.J. (1994). The sources of economic growth of the East Asian newly industrialized countries. Journal of the Japanese and International Economies, 8(3), 235-271. doi. 10.1006/jjie.1994.1013
Liang, C. (2001). Measuring Total Factor Productivity in Republic of China, Measuring Total Factor Productivity, Tokyo: Asian Productivity Organization: 15-29.
Mahmoudzadeh, M., & Moosavian, S.A.Z.N. (2013). Measuring and analyzing the shares of economic growth sources in the mine sector of Iran, Iranian Economic Journal – Macroeconomics, 13, 121-142.
Mahmoudzadeh, M., & Moosavian, S.A.Z.N. (2016). Measuring and analyzing the shares of economic growth sources in the mining sector of Iran: A neoclassical growth accounting approach. [Retrieved from].
Mawson, P., Carlaw, K.I., & McLellan, N. (2003). Productivity measurement: Alternative approaches and Estimates, New Zealand Treasury, Working Paper, No.03/12.
Moosavian, S.A.Z.N. (2009). Estimating production function and measuring total factor productivity growth in the mine sector of Iran, Azad University of Iran, Master’s Thesis, Iran.
Moosavian, S.A.Z.N. (2015a). Production function of the mining sector of Iran, European Online Journal of Natural and Social Sciences, 4(1), 138-153.
Moosavian, S.A.Z.N. (2015b). Production Function of the mining sector of Iran. [Retrieved from].
Moosavian, S.A.Z.N. (2016a). Teaching economics and providing visual “big pictures, Journal of Economics and Political Economy, 3(1), 119-133. doi. 10.1453/jepe.v3i1.631
Moosavian, S.A.Z.N. (2016b). The visual “big picture” of intermediate macroeconomics: A pedagogical tool to teach intermediate macroeconomics, International Journal of Economics and Finance, 8(9), 234. doi. 10.5539/ijef.v8n9p234
Moosavian, S.A.Z.N. (2017), Using the interactive, graphic syllabus in the teaching of economics, American Journal of Business Education, In Press.
Naumenko, A., & Moosavian, S.A.Z.N. (2016). Clarifying theoretical intricacies through the use of conceptual visualization: Case of production theory in advanced microeconomics, Applied Economics and Finance, 3(3), 103-122. doi. 10.11114/aef.v3i4.1781
Naumenko, A., & Moosavian, S.A.Z.N. (2017). A holistic visual “wheel of relationships” in production theory, a poster presented at the American Economic Association (AEA) poster session at the 2017 ASSA/AEA Meeting, Chicago, IL, USA.
Qingwang, G., & Junxue, J. (2005). Estimating total factor productivity in China, Economic Research Journal, 6(1), 51-60.
Shahabadi, A. (2006). Comparative analysis of total factor productivity in industrial sector of Iran, Iranian Journal of Economic Research, 82, 87-120.
Shankar, S., & Rao, B., (2012). Estimates of the long-run growth rate of Singapore with a CES production function. Applied Economics Letters, 19(15), 1525-1530. doi. 10.1080/13504851.2011.637889
Solow, R. (1957). Technical changes and aggregate production function, Review of Economics and Statistics, 39(3), 312-320. doi. 10.2307/1926047
