Document Type : Research Paper

Authors

1 Department of Agricultural Economics, Faculty of Agriculture, University of Tehran, Karaj, Iran.

2 Department of Agricultural Economics, Faculty of Agriculture, University of Tehran

10.22055/jqe.2023.43964.2560

Abstract

The Stagflation in Iran's economy has caused a decrease in real per capita income and purchasing power and a drop in total demand. The decrease in total demand components and its continuation will damage the productive capacity of the economy, reduce economic growth and gross domestic product. Therefore, a solution should be thought of to solve this stagnation that has formed on the demand side of the economy. In this context, financial development and facilities can stimulate demand and create the necessary platforms for the reconstruction of production processes. The purpose of this study was to investigate the growth of Iran's economic activities due to the facilities provided to socio-economic institutions (non-financial companies and households (separated by urban and rural income groups)) with the new approach of Iran's financial social accounting matrix. For this purpose, by updating the data of supply and use table of Iran's economy, Iran's financial social accounting matrix was compiled for 2018. The results of this research showed that stimulating the demand of households and non-financial companies increases the production of economic activities at a suitable level. Therefore, by providing facilities and credits for institutions, it is possible to provide the basis for stimulating the demand and expect to improve the production of activities and reduce the recession. In this context, by adopting measures and solutions such as granting purchase facilities to consumers, it is possible to provide the basis for the prosperity of production units. Also, by facilitating the receipt of capital facilities for households and non-financial companies, it is possible to help stimulate the supply side.

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