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Simulation of Aggregate Demand Impacts on the Sectoral Value Added in the Iranian Economy


  • Valadkhani, Abbas


The purpose of this study is to measure the impact of final demand aggregates on the sectoral value added in the Iranian economy by employing input-output analysis and econometric modelling. This paper presents a model in which the sectoral value added for major aggregate sectors is linked with final demand deliveries. The policy implications of this study highlight the outcome of a sustained percentage shock in each component of aggregate demand, other components remaining unchanged, on the growth of the sectoral value added in four counterfactual simulation experiments. These policy implications can provide insights for decision makers and planners in Iran.

Suggested Citation

  • Valadkhani, Abbas, 1997. "Simulation of Aggregate Demand Impacts on the Sectoral Value Added in the Iranian Economy," MPRA Paper 50385, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:50385

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    References listed on IDEAS

    1. Sapir, Andre, 1976. "A note on input-output analysis and macroeconometric models," Journal of Development Economics, Elsevier, vol. 3(4), pages 377-383, December.
    2. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    3. Jere R. Behrman & James Hanson, 1979. "Short-Term Macroeconomic Policy in Latin America," NBER Books, National Bureau of Economic Research, Inc, number behr79-1, June.
    4. Preston, Ross S, 1975. "The Wharton Long Term Model: Input-Output within the Context of a Macro Forecasting Model," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 16(1), pages 3-19, February.
    5. Rogelio Montemayor Seguy & Ramirez, 1975. "The Use of Input-Output Analysis in an Econometric Model of the Mexican Economy," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 4, number 4, pages 531-552 National Bureau of Economic Research, Inc.
    6. Pesaran, H., 1995. "Planning and Macroeconomic Stabilization in Iran," Cambridge Working Papers in Economics 9508, Faculty of Economics, University of Cambridge.
    7. Ronald G. Bodkin & Lawrence R. Klein & Kanta Marwah, 1991. "A History of Macroeconometric Model-Building," Books, Edward Elgar Publishing, number 51.
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    More about this item


    Iran; Input-output; Asia;

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production


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