trade and poverty: the case of Iran

Sammanfattning: Abstract: Using the vector error correction model, the relationship between trade and poverty is examined in this thesis. We have run eight models for two measures of poverty and mean per capita expenditure for six groups of expenditure in Iran from 1984 to 2005. The independent variables used in the models are: non-oil GDP, inflation, export share of GDP and import Share of GDP. Also, we have used three dummy variables to cover the war period, changes in exchange regimes, and the presence of a pro-trade government. The findings suggest that exports increase the means per capita expenditure and indices of poverty of the poor in the long-run, while in the short-run they simply reduce the depth of poverty. Conversely, results show that imports decrease the mean per capita expenditure and increase the poverty measures indicators of all groups in the long-run, while reducing the headcount index by 10% in the short-run. In addition the aggregate measures of trade increase poverty indicator in the long-run, while it reduces the mean per capita expenditure of the wealthier groups, more than poorer groups.