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Theoretical and Applied Economics
No. 5 / 2014 (594)

Effects of macroeconomic variables on poverty in Iran (Application of bootstrap technique)

Farhad Khodadad KASHI
Payame Noor University, Tehran, Iran
Mohammad Nabi SHAHIKI TASH
University of Sistan and Baluchestan, Zahedan, Iran

Abstract. It is believed that the level of poverty is significantly determined by macroeconomics variables such as inflation, government expenditure and unemployment rate. In this paper attempt has been made to investigate how macroeconomics variables affect the level of poverty in Iranian society. Our findings indicate that economic growth has significant effects on poverty in Iran. In addition, there is a negative relation between poverty and growth, namely increasing the growth rate leads to poverty reduction. The results of this study have also shown that unemployment and inflation have positive effects on poverty, while social security expenditure relating to government expenditure has no meaningful effects on poverty. In this study bootstrap technique is used to check the validity of the results.

Keywords: poverty, unemployment, growth, government expenditure, bootstrap.

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