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The Crowding Out and Crowding In Effects of the Government Fiscal Policy on the Real Estate Investment and Public Prosperity in Iran

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  • Jariani, Farzaneh

Abstract

According to the Keynesian Model, the effectiveness of fiscal stabilization policy will rest on the size of fiscal multipliers and one of the most important and effective factors on the fiscal increasing coefficient can be the same crowding out & crowding in effects of the government fiscal policy on the private sector's investment on the real estate which it has been taken into consideration over the last few decades. Since, there is an interaction among the governance variables, government and investment and therefore an active private sector's investment is known as a very significant strategy in the direction of retaining the economic sustainable growth and with regards to this important matter in this study, we have taken into account the simultaneous effects of economic indexes, prosperity index, economic freedom index, governance index and comprehensive sanctions on the real estate investment and Iranian people's welfare applying the Multilevel GLM method from 1985 to 2019. Results of such study show that the government's macro policy makings have had a crowding out effect on the private investments on the real estate meanwhile the private investments on the real estate, bad governance and low and non-inclusive economic growth have lead to the small participation of manpower and losing the social capital and generally speaking, the failure of ensuring the social welfare and prosperity.

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  • Jariani, Farzaneh, 2021. "The Crowding Out and Crowding In Effects of the Government Fiscal Policy on the Real Estate Investment and Public Prosperity in Iran," MPRA Paper 105506, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:105506
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    References listed on IDEAS

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    1. Faraji Dizaji, Sajjad & Jariani, Farzaneh & Najarzadeh, Reza, 2018. "Impact of sanctions on bilateral trade of agricultural products between Iran and MENA region and the EU countries," MPRA Paper 89438, University Library of Munich, Germany.
    2. H. Ahmed & SM. Miller, 2000. "Crowding‐out and crowding‐in effects of the components of government expenditure," Contemporary Economic Policy, Western Economic Association International, vol. 18(1), pages 124-133, January.
    3. Zahra Karimi Takanlou, 2014. "Can Budget Deficits Financing, Crowed Out Private Sector? Comparative Study of the Cases of Iran and Algeria," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 18(3), pages 1-25, Autumn.
    4. Zolfaghari, Mehdi & Jariani, Farzaneh, 2020. "Water-Energy-Food Nexus in the Middle East and North African Countries (MENA)," MPRA Paper 104583, University Library of Munich, Germany.
    5. Zolfaghari, Mehdi & Jariani, Farzaneh, 2021. "Food Security in the Middle East and North Africa (MENA)," MPRA Paper 105078, University Library of Munich, Germany.
    6. Farla, Kristine & de Crombrugghe, Denis & Verspagen, Bart, 2016. "Institutions, Foreign Direct Investment, and Domestic Investment: Crowding Out or Crowding In?," World Development, Elsevier, vol. 88(C), pages 1-9.
    7. Mehnatfar, Uosef, 2015. "Public Expenditure Impact on Private Investment in Iran: Crowding out or Crowding in," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 2(1), pages 143-162, April.
    8. Indraneel Chakraborty & Itay Goldstein & Andrew MacKinlay, 2018. "Housing Price Booms and Crowding-Out Effects in Bank Lending," The Review of Financial Studies, Society for Financial Studies, vol. 31(7), pages 2806-2853.
    9. Sadegh Bakhtiari & Hojjat Izadkhasti & Seyed Komail Tayebi, 2013. "Crowding out Effect of Foreign Aid in Selected Developing Countries: Panel Data Evidence," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 18(2), pages 51-64, spring.
    10. Morrissey, Oliver & Udomkerdmongkol, Manop, 2012. "Governance, Private Investment and Foreign Direct Investment in Developing Countries," World Development, Elsevier, vol. 40(3), pages 437-445.
    11. Eden, Maya & Kraay, Aart, 2014. ""Crowding in"and the returns to government investment in low-income countries," Policy Research Working Paper Series 6781, The World Bank.
    12. Adam P. Balcerzak & Elzbieta Rogalska, 2014. "Crowding Out and Crowding in within Keynesian Framework. Do We Need Any New Empirical Research Concerning Them?," Working Papers 2/2014, Institute of Economic Research, revised May 2014.
    13. Heydari, Hassan & Jariani, Farzaneh, 2020. "Analyzing Effective Factors of Capital Outflow from the Middle East and North African Countries (MENA)," MPRA Paper 104547, University Library of Munich, Germany.
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    Cited by:

    1. Jariani, Farzaneh, 2021. "The Impact of Governance on Inclusive and Equitable Quality Education (SDG4) in Iran," MPRA Paper 108232, University Library of Munich, Germany.

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    More about this item

    Keywords

    Keynesian Model; Fiscal Policy; Real Estate; Crowding Out; Crowding In; Good Governance; Comprehensive Sanctions; Legatum Prosperity Index; Index of Economic Freedom;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G3 - Financial Economics - - Corporate Finance and Governance
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O42 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Monetary Growth Models
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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