Tyranny of numbers

New data on internet use in Iran

Posted in General by Djavad on October 30, 2016

It has been a while since I posted anything here.  Today, I am prompted to write because my “good” excuse for the long absence has been removed.  The website of the Statistical Center of Iran (SCI), which has been inaccessible from outside Iran since it was hacked last May, is back on.  (My other excuse — resettling in Cambridge, MA, to spend my sabbatical year (2016/17) at the Middle East Initiative of Harvard Kennedy School — is less valid every day.)
Access to the regular inflow of data from the SCI website has been crucial for my writing on this blog as well as for my academic research.  Without numbers, the blog would turn into the Tyranny of Opinions on Iran, of which there is plenty already.  So yesterday I was pleasantly surprised  to discover that access to the site for users outside Iran had been restored (hopefully permanently), and I found several interesting new reports to read and write about. (more…)

Revelations of high CEO pay in Iran: what do they imply about wage inequality?

Posted in Inequality by Djavad on June 23, 2016

The recent revelations of “astronomical” salaries of CEOs and top government officials in Iran, up to 2.4 billion rials per month ($68,000 at the free market exchange rate or $200,000 PPP) have embarrassed and put pressure on the Rouhani government.  But how high are these salaries in light of the wage distribution in Iran and CEO pay elsewhere? (more…)

Long term trends in poverty and inequality in Iran

Posted in Inequality, Poverty by Djavad on March 29, 2016

In my last post I argued that, after two years of improvement, poverty and inequality were on the rise in 2014/15.  In this post I extend the calculation of poverty and inequality measures to the entire period for which survey data are available, 1984/85-2014/15. This  post also updates the results in my 2009 paper published in the Journal of Economic Inequality, which covered the period from before the revolution to 2005.   (more…)

Elections in times of economic crisis

Posted in General, Inequality, Poverty by Djavad on March 13, 2016

In a post that I published earlier this week on the Brookings blog, Future Development, I argued that because Iran’s February 26 parliamentary elections took place at an economically inopportune time the success of the moderate candidates is all the more significant.  In my last post here, written a couple days before the election, I had presented some evidence for the poor state of the economy — loss of industrial jobs and falling living standards since Rouhani’s election in June 2013.  In this post I expand the discussion of living standards, poverty, and inequality in recent years. (more…)

Will a weak economy affect Iran’s parliamentary election this week?

Posted in General by Djavad on February 24, 2016

Iran’s parliamentary election this Friday promises to be very consequential for the continuation of Rouhani’s reforms — “fateful” (sarnevesht saz), is how former president Rafsanjani described it.  But it is taking place at a tough economic time.  The nuclear deal and the removal of sanctions are beginning to have an effect, but not soon enough for people to feel the benefits of reconnecting to the global economy in their pocketbook. (more…)

More of the same (austerity) in Iran’s new budget for 2016/17

Posted in General, Macroeconomy by Djavad on January 23, 2016

For the third year in a row the government has proposed a tight budget, keeping spending constant in real terms.  I am not sure the macroeconomics I studied decades ago has much relevance to Iran’s current economy, but the Keynesian in me says, given the economy’s dire conditions, a bit of fiscal stimulation could not hurt.  The government still believes that inflation rather than bankruptcies and unemployment as the enemy number one.  But perhaps Rouhani’s economic team is banking on the lifting of sanctions to pull Iran out of recession and generate a modest 5% growth.  This seems to be also what the IMF expects.
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Understanding the rial’s strength

Posted in General, Inflation, Macroeconomy, Sanctions by Djavad on January 18, 2016

Last month a headline (link in Persian) in Eghtesad News read: “Do not buy dollars, it will get cheaper”!  More surprising than the headline was who said it: Iran’s Central Bank Governor, Valliollah Seif.  As his critics were quick to point out, it was unwise for the one official whose economic predictions should be muted and very general — the US Fed’s statements about the future need expert decoding — to claim to know which way the exchange rate will move in the future (you can read here — in Persian — the CBI’s lengthy explanation for the controversial remarks). (more…)

Khodadad Farmanfarmaian: a personal remembrance

Posted in General by Djavad on December 22, 2015

Khodadad Farmanfarmaian, the chief architect of Iran’s economic miracle in the 1960s, passed away in London on December 16, 2015 at the age of 87. He was one of the Shah’s few good men, and helped launch Iran’s “decade of economic miracle” in the 1960s, before 9% annual growth rates became commonplace in Asia. He held key positions before the revolution as the Governor of the Central Bank and the head of the Plan Organization. In 1973, he broke from the Shah, whom he described as having “no real understanding of economic development,” over the ill-advised and ill-fated upward revision of the Fifth Plan in 1974. (more…)

Is the Tehran Stock Exchange a good barometer of Iran’s economy?

Posted in Employment, General, Macroeconomy by Djavad on October 10, 2015

The Tehran Stock Exchange (TSE) has been in the news lately, not because its 22-month downward slide has ended but because four cabinet members highlighted its plight in a letter to President Rouhani.  The letter was written on September 9 but came to light last week.  The brouhaha that followed, however, was not about the TSE and what its poor performance means for the economy, which appears to be heading for a double-dip recession.  Attention has instead focused on division within Rouhani’s coalition government and what it means for the future of his austerity program.  I wrote about these issues for Al Monitor last week; here I’d like to take a closer look at the performance of the TSE — how badly it has done, and why. (more…)

Will Rouhani complete the reform of subsidies?

Posted in General, Inequality, Poverty, Subsidy reform by Djavad on September 9, 2015

In principle, the answer to this question should be yes.  Rouhani’s administration professes to be pro-market and is eager to shift resources from wasteful consumption to economic growth.  What better way to remove energy subsidies and use the proceeds to fund the cash-starved development budget? (more…)