Saving structure, housing speculation, and economic growth in the Iranian economy
By: Mohammadzaheh, Yousef and Kahriz, Arash Refah
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Material type: 
BookPublisher: Journal of Social and Economic Development Description: 25(1), Jun, 2023: p.170-195.Subject(s): Saving, Economic growth, Housing, Speculation, Iranian economy
In:
Journal of Social and Economic DevelopmentSummary: Economic theories argue that saving is a significant financial resource for investment and economic growth; however, its structure has received little scholarly attention. Saving structure could result in undesirable consequences if its structure causes instability in the economy. This study investigates the relationship among saving structure, housing speculation, and economic growth in the Iranian economy from 1970 to 2020. Findings show that saving does not contribute to economic growth in the Iranian economy but directs it to speculative activities in the land and housing market. This speculative behavior increased the housing price index far more than the total price index in this market. In such a situation, it could be challenging to start a business in Iran since land is considerably expensive. Moreover, Iranian households allocate a large proportion of their income to purchasing land and housing. This behavior causes a recession in other sectors of the Iranian economy as well. Although the Iranian economy enjoys a high level of saving and financial resources, it constantly suffers from a budget deficiency for investment since saving is flown toward speculation in the land and housing market. – Reproduced
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
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Articles
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Indian Institute of Public Administration | 25(1), Jun, 2023: p.170-195 | Available | AR129547 |
Economic theories argue that saving is a significant financial resource for investment and economic growth; however, its structure has received little scholarly attention. Saving structure could result in undesirable consequences if its structure causes instability in the economy. This study investigates the relationship among saving structure, housing speculation, and economic growth in the Iranian economy from 1970 to 2020. Findings show that saving does not contribute to economic growth in the Iranian economy but directs it to speculative activities in the land and housing market. This speculative behavior increased the housing price index far more than the total price index in this market. In such a situation, it could be challenging to start a business in Iran since land is considerably expensive. Moreover, Iranian households allocate a large proportion of their income to purchasing land and housing. This behavior causes a recession in other sectors of the Iranian economy as well. Although the Iranian economy enjoys a high level of saving and financial resources, it constantly suffers from a budget deficiency for investment since saving is flown toward speculation in the land and housing market. – Reproduced
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