Saeed Moshiri

NEURAL NETWORK VERSUS ECONOMETRIC MODELS IN FORECASTING INFLATION

Artificial neural network modeling has recently attracted much attention as a new technique for estimation and forecasting in economics and finance. The chief advantages of this new approach are that such models can usually find a solution for very complex problems, and that they are free from the assumption of linearity that is often adopted to make the traditional methods tractable. In this paper we compare the performance of Back-Propagation Artificial Neural Network (BPN) models with the traditional econometric approaches to forecasting the inflation rate. Of the traditional econometric models we use a structural reduced form model, an ARIMA model, a vector autoregressive model, and a Bayesian vector autoregression model. We compare each econometric model with a hybrid BPN models which uses the same set of variables. Dynamic forecasts are compared for three different horizons: one, three and twelve months ahead. Root mean squared errors and mean absolute errors are used to compare quality of forecasts. The results show the hybrid BPN models able to forecast as well as all the traditional econometric methods, and to outperform them in some cases.

How important are individual, household and commune characteristics in explaining utilization of maternal health services in Vietnam?

Using Vietnams latest National Household Survey data for 2001-2002 this paper assesses the influence of individual, household and commune-level characteristics on a womans decision to seek prenatal care, on the number of prenatal visits, and on the choice between giving birth at a health facility or at home. The decision to use any care and the number of prenatal visits is modeled using a two-part model. A random intercept logistic model is used to capture the influence of unobserved commune-specific factors found in the data regarding a womans decision to give birth at a health facility rather than at home. The results show that access to prenatal care and delivery assistance is limited by observed barriers such as low income, low education, ethnicity, geographical isolation and a high poverty rate in the community. More specifically, more prenatal visits increase the likelihood of giving birth at a health facility. Having compulsory health insurance increases the odds of giving birth at a health facility for middle and high income women. In contrast, health insurance for the poor increases the likelihood of having more prenatal visits but has little effect on the place of delivery. These results suggest that the existing safe motherhood programs should be linked with the objectives of social development programs such as poverty reduction, and that policy makers need to view both the individual and the commune as appropriate units for policy targeting.

Taking Account of Context: How Important Are Household Characteristics in Explaining Adult Health-Seeking Behaviour? The Case of Vietnam

Understanding the factors affecting the utilization of health services is essential for health planners, especially in low income countries where increasing access to and use of health services is one of the main policy goals of government. While much has been written on adult health-seeking behaviour, there is comparatively little known about the influence of the broader context such as the effects of family and community on individual use of health care services in low income countries. Using Vietnams latest National Household Survey data, this paper empirically assesses the influence of individual- and household-level factors on the use of health care services, while controlling for the unobserved household-level effects. The estimates obtained from a multilevel logistic regression model suggest that the individuals likelihood of seeking treatment is jointly determined by the observed individual- and household-level characteristics as well as unobserved household-level effects. The chance of seeking medical treatment when ill varies strongly with the observed individual- and household-level covariates, including health insurance status, income, the type and severity of illness, the number of other household members with an ailment and the presence of young children in the household. However, the variability implied by the unobservable household-level effects outweighs the variability implied by the observed covariates, indicating a high degree of homogeneity in health-seeking behaviour among the household members. Failure to take account of homogeneity in health-seeking behaviour among the household members leads not only to biased results but also to inefficient policy targeting. Policies aimed at increasing access to and the use of medical services need to be sympathetic to both individuals and households.

Inflation-Growth Profiles Across Countries: Evidence from Developing and Developed Countries

There is growing evidence from multi‐country studies indicating that there is a turning point in the relationship between inflation and economic growth beyond which the detrimental effects of high inflation offset the stimulating effects of mild inflation on growth. However, it is not clear whether it is appropriate to assume an identical turning point in the inflation and growth relation across countries at various stages of development. Using a non‐linear specification and the data from four groups of countries at various stages of development, this paper examines the possibility for a family rather than a single inverted U relation across countries at various stages of development. The estimated turning points are found to vary widely from as high as 15% per year for the lower‐middle‐income countries to 11% for the low‐income countries, and 5% for the upper‐middle‐income countries. No statistically detectable, long‐run relationship between inflation and growth is evident for the OECD countries. The results indicate the potential bias in the estimation of inflation–growth nexus that may result from combining various countries at different levels of development. The existence of such a degree of heterogeneity across countries at various stages of development also suggests the inappropriateness of setting a single, uniform numerical policy target applicable to all (developing) countries.

ICT AND PRODUCTIVITY OF THE MANUFACTURING INDUSTRIES IN IRAN

This paper extends the existing evidence on the relationship between Information and Communication Technology (ICT) and productivity using data from the entire Iranian manufacturing sector (22 industries) over the period 1993–1999. Estimates of efficiency using panel data confirm the positive and significant impact of ICT investments on productivity. Our finding is consistent with the most recent literatures in the context of developed and a few middle‐income developing countries. Human capital and increasing ICT capital are probably two determining factors in gaining the positive payoffs from ICT investments in Iran.

The effects of the energy price reform on households consumption in Iran

The substantial subsidizing of energy prices over the years has led to high energy consumption, inefficiencies, fiscal pressures, and environmental problems in Iran. To address the increasing socio-economic problems associated with the energy subsidies, the government embarked on an aggressive energy price reform through which energy subsidies were removed and cash handouts were given to all households in 2010. In this paper, I analyze the effectiveness of the energy price reform in Iran by estimating energy demand elasticities for households in different income groups. I apply a two-stage consumer optimization model and estimate the system of energy expenditures shares using the household budget survey data for the period 2001–2008. The results show that the overall price elasticities of demand are small, but income elasticities are close to one. The results also indicate heterogeneous responses to energy price and income changes in different income groups. Specifically, the urban households show stronger response to price changes, but rural households, particularly mid-income households, to income changes. These findings suggest that the current policy of price increases would not solely be able to reduce energy consumption and, therefore, it should be geared towards increasing energy efficiency through a series of price and non-price measures.

Long Run Energy Demand in Iran: A Scenario Analysis

Purpose: Iran as an energy-rich country faces many challenges in the optimal utilization of its vast resources. High rates of population and economic growth, a generous subsidies program, and poor resource management have contributed to rapidly growing energy consumption and high energy intensity over the past decades. The continuing trend of rising energy consumption will bring about new challenges as it will shrink oil export revenues restraining economic activities. This calls for a study to explore alternative scenarios for the utilization of energy resources in Iran. In this study, we model demand for energy in Iran and develop two business-as-usual and efficiency scenarios for the period 2005-2030. Design/Methodology/Approach: We use a techno-economic or end-use approach to model energy demand in Iran for different types of energy uses and energy carriers in all sectors of the economy and forecast it under two scenarios: Business As Usual (BAU) and Efficiency. Findings: Iran has a huge potential for energy savings. Specifically, under the efficiency scenario, Iran will be able to reduce its energy consumption 40 percent by 2030.The energy intensity can also be reduced by about 60 percent to a level lower than the world average today. Implications: The energy savings under the efficiency scenario will generate significant additional revenues and will lead to a 45 percent reduction in CO2 equivalent emissions by 2030 as compared to the BAU trend. Originality: This study is a comprehensive study that models the Iranian energy demand in different sectors of the economy using data at different aggregation levels and a techno-economic end-use approach to illuminate the future of energy demand under alternative scenarios.

The Foreign Exchange Constraints to Economic Adjustment: The case of Iran

While a great deal of work has been devoted to the assessment of the effects of structural adjustment programmes, little is known about the relative importance of external financing and its contribution to the success of these adjustment programmes. This paper examines this question, using Irans recent experience with an orthodox structural adjustment with its limited access to medium- and long-term external financing. Using the annual data for 1963-94, a three-gap model of growth is formulated and estimated in which economic growth is constrained by domestic saving, foreign exchange and public sector resource availability. The resulting foreign exchange-gap equation demonstrates a sharp trade-off between investment (capacity generation) and the capacity utilization rate. The model is simulated over the period 1995-99 under three growth path scenarios. The size of the foreign exchange gap under these growth path scenarios illustrates quite vividly the centrality of the foreign exchange constraint to the achievement of a modest growth rate in the medium-term.

Asymmetric Effects of Oil Price Shocks in Oil‐Exporting Countries: The Role of Institutions

Many empirical studies on the oil price shock effects on the economies of oil-exporting countries have assumed a linear relationship between the shocks and macroeconomic variables, offering no insights on the dynamics of different types of shocks. The literature also assumes a homogeneous response to oil price shocks by oil-exporting countries. This paper investigates the non-linear effects of oil price shock on macroeconomic performance in the context of two groups of oil-exporting countries using a VAR model with price shocks estimated by a GARCH method. The model consists of oil price shocks and economic growth as two major variables of interest as well as intermediate variables such as investment, exchange rate, and inflation rate. The sample includes nine major oil-exporting countries, six developing and three developed countries, for the period 1970–2010. The results indicate that not all oil-exporting countries are alike in responding to oil shocks. While oil shocks have asymmetric effects in oil-exporting developing countries; lower oil prices lead to major revenue cuts and ensuing stagnation in the economy, but higher oil prices and accompanying higher revenues do not translate into sustained economic growth; they do not have significant effect on economic growth in oil-exporting developed countries. The panel data estimation results also suggest that heterogeneous responses to oil price shocks in oil-exporting countries can be explained by differences in their institutional quality, particularly government effectiveness.

Privatization and capital formation in developing countries: an empirical analysis

The spur for privatization and its impact on economic performance have been analysed from many perspectives, including microeconomics, macroeconomics, and institutional economics. Previous research has focused on efficiency reasons for privatization at the level of the firm, and the relative performance of state‐owned enterprises and privately owned firms. This article investigates the macroeconomic facet of privatization with particular attention paid to the relation between privatization and capital formation in developing countries. Our study uses recent World Bank data on privatization for 105 countries over the time period 1988–2003. We explore the impact of privatization on capital formation by conducting two‐stage least squares and ordinary least squares estimations within three time frames. Our findings indicate that the effect of privatization on capital formation varies across regions and time frames. In general, privatization is neutral with regard to investment.