Iranian economy Essay Example | Topics and Well Written Essays - 2250 words

Iranian providence - Essay ExampleThe transaction of the Iranian economy in the early twenty-first century has witnessed a marked deterioration, in absolute terms as well as relative to other countries in the region. The growth of the economy has slackened drastically (Ramin, 2004). The economy, with a quickly expanding population, has experienced a marked decline in investment, low labor productivity, a widening consider gap, a fast accumulation of debt and, above all, a sharp decline in the standard of living. What be the determinants of scotch performance? There is broad agreement among economists that macroeconomics stability characterized by moderate and predictable inflation, a small budget deficit, and the relative stability of the real exchange rate is essential for long-term economic growth (Sciolino, 2005). Several empirical studies suggests that stable prices, a sensible exchange rate that does not dissuade exports and good fiscal and monetary disciplines are nece ssary, though not sufficient, conditions for a sustainable improvement in living standards. Viewed from this perspective the deterioration of in the performance of the Iranian economy since 1980 can be generally explained by the macroeconomic stability that has characterized this post revolutionist period (Sciolino, 2005).The theme of this proposal is centered on the position of the state in the process of economic and social development in the post revolutionary period. The emphasis, however, is on economic performance.... there is general consensus amongst close observers of the Iranian economy about the decisive historical role of the state. Furthermore, a distinctive feature of the current Iranian state is that sizeable oil revenue accrues to the regimen because of its monopoly right over oil. The rentier nature of the state provides it with economic power and financial independence, although the state plays a central role in distributing this wealth to the population throu gh direct subsidies and the creation of economic activities.2. Irans Economy in a comparative Context There has been a remarkable deterioration in the growth performance of the Iranian economy since the late 1980s, both relative to its past performance and compared to international standards. This is reflected in the at a lower place table, which shows comparative per capita GDP trends for Iran and United States. Though the comparison does show a major difference, it is to be observe that here we have compared a lower middle income economy to a higher economy.Table Comparative Figures of Iran and US Economy for the years 2003 - 2005Source World Bank Data Banks.3. Economic Policy and industrial StructureThe rapid growth of the Iranian economy during the two decades preceding the 1979 Revolution took place in the context of an import substitution industrialization strategy. The paradoxical result of this strategy was to make the economy increasingly dependent on oil export revenues in order to finance the intermediate and capital goods imports requisite by Irans heavily protected industrial sector (Halliday, 1979). In the immediate aftermath of the revolution a considerable portion of large-scale modern industry, and the entire banking and insurance