The Role of Business Cycles in the Impact of Government Social and Cultural Expenditures on Social Welfare (NARDL Approach)

Ahmadvand, Narges; Alizadeh, Mohammad; Fotros, Mohammad Hassan; Delfan, Mahbubeh

doi:10.22055/jqe.2022.38986.2429

Document Type : Article-Based Dissertations

Authors

¹ PhD Candidate in the field of public sector, Lorestan University, Lorestan, Iran .

² Economy Associate Professor, Lorestan University, Lorestan, Iran.

³ Professor, Department of Economics, Faculty of Economics and Social Sciences, Bu- Ali Sina University, Hamedan, Iran.

⁴ Economy Assistant Professor, of Lorestan University,

https://doi.org/10.22055/jqe.2022.38986.2429

Abstract

EXTENDED ABSTRACT
INTRODUCTION
As a multidimensional concept, social welfare includes not only economic issues such as per capita income, but also other issues such as health, housing, education, employment, environment include for assessing individual well-being in a society (Noll, 2002). Ambia & Sujarwoto (2018) stated that government policies in the proper allocation of resources are a determining factor in increasing social welfare (Ambia & Sujarwoto, 2018).Thus, the evolution of government policies shows the importance of prioritizing government expenditure in increasing welfare. Along with the process of allocating government budgets in various sectors of the economy, governments have always keep the ratio of expenditures to GDP constant. So that they increase their expenditures slowly during the boom periods and refrain from rapidly declining expenditures during the recession (Ghasemi & Mohajeri, 2015). In other words, governments have to reduce economic fluctuations and make society stability to achieve goals such as increasing social welfare. Therefore, it is important to consider the role of business cycles in the correct implementation of government policies in increasing social welfare.

METHODOLOGY

It should be noted that all variables were considered logarithmically in the estimation model.
In order to estimate the models during the period 1973-2019, research data have been collected from the Central Bank of the Islamic Republic of Iran, the Ministry of Economic Sciences and Finance, the Statistics Center of Iran and the World Bank.

CONCLUSION and POLICY REMARKS
The results show that the positive shocks of government expenditures on social and cultural affairs, the chapters of education, physical education, culture and art, social welfare and health have caused increasing social welfare significantly. The negative shocks of government expenditures on chapters of culture and art and education during periods of recession and social welfare chapter during periods of boom have caused increasing social welfare significantly. Also, in the negative shocks of government expenditures on social and cultural affairs during business cycles and the health chapter during boom periods have reduced social welfare, significantly. Considering the positive shock of government expenditures, social and cultural affairs, the chapters of education, physical education, culture and art, social welfare and health have a greater impact on social welfare during the boom period. while the results of negative shock of government expenditures, social and cultural affairs and the education chapters have a greater impact in the recession period and the chapters of physical education, culture and art, social welfare and health have a greater impact on social welfare in boom periods.
Government Expenditure on social and cultural affairs and related sub-chapters during business cycles has had asymmetric effects on social welfare. Therefore, with a positive shock of government expenditures, government social and cultural s expenditures should be spent on the social welfare, culture and arts, physical education, health and education chapters during periods of recession and boom. Also, with negative shocks, government expenditures during periods of recession should be spent on the culture and arts and education chapters, and during boom periods on social welfare, culture, and arts chapters.

Keywords

Main Subjects

Public sector economy and Fiscal institutions

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The Role of Business Cycles in the Impact of Government Social and Cultural Expenditures on Social Welfare (NARDL Approach)

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Volume 21, Issue 4 - Serial Number 83Vol. 21, No. 4, Winter 2025March 2025Pages 122-162

Volume 21, Issue 4 - Serial Number 83
Vol. 21, No. 4, Winter 2025
March 2025
Pages 122-162