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The Effects of an Increase in the Investment and the Total Factor Productivity of the Mining Sector on the Value Added and Export of Different Economic Sectors in Iran

Author

Listed:
  • Behbudi, Davood

    (Professor of Economics, University of Tabriz)

  • Barghi Oskoee , Mohammad Mahdi

    (Associate Professor of Economics, University of Tabriz)

  • Mohammadi Khaneghahi, Robab

    (Ph.D. Candidate in Economics, University of Tabriz)

Abstract

The mining sector is able to accelerate the economic growth and development in countries by providing raw materials of production, employment, value added and tax revenues. This is possible by adopting correct policies in this sector and through understanding its importance in the economy and assessing the effects it may have on the other economic sectors. In this regard, this study by using a dynamic computable general equilibrium (DCGE) model and social accounting matrix (SAM), analyzes the effects of an increase in the investment and total factor productivity of the mining sector on the value added and export of economic sectors in Iran. According to the findings, an increase in the mining sector`s investment, positively affects the value added and export of all economic sectors in Iran. In addition if the total factor productivity and the investment of the mining sector increase simultaneously, by assuming the stability of the other conditions, the resources including the labor force and capital will be absorbed and reallocated from other sectors to the mining sector. Although according to the backward and forward spillover effects, the value added and export of the other sectors in comparison to the basic scenario will increase, but the growth of the value added and export of the mining sector will be far more than the other economic sectors of the country. The results also reveal that the development in the mining sector in Iran has the least effect on the agricultural sector and the most effect on the energy sector.

Suggested Citation

  • Behbudi, Davood & Barghi Oskoee , Mohammad Mahdi & Mohammadi Khaneghahi, Robab, 2018. "The Effects of an Increase in the Investment and the Total Factor Productivity of the Mining Sector on the Value Added and Export of Different Economic Sectors in Iran," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 4(4), pages 199-228, March.
    • Handle: RePEc:ris:qjatoe:0095
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    Citations

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    Cited by:

    1. Morgunov, V.I. (Моргунов, В.И.), 2016. "The Liquidity Management of the Banking Sector and the Short-Term Money Market Interest Rates [Управление Ликвидностью Банковского Сектора И Краткосрочной Процентной Ставкой Денежного Рынка]," Working Papers 21311, Russian Presidential Academy of National Economy and Public Administration.

    More about this item

    Keywords

    Mining; Investment; Productivity; Computable general equilibrium;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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