Seigniorage and Distribution Income in Iran (Wealth Effect)

In this paper we investigate the long run relationship between Seigniorage, Gini coefficient, Unemployment, Minimum Wage Rate with reference Iran over the period 1983-2013 using ARDL approach which is a newly developed econometric technique. The estimated results indicate that in the long-run Seigniorage, Unemployment, minimum wage rate have a significant impact on Gini coefficient in Iran. The dynamics of , Gini coefficient show that the effects of Seigniorage ,Unemployment, minimum wage rate are much smaller in the short run than long run. The results also reveal that Gini coefficient in Iran is stable, despite the economic reforms pursued by the government since the late 1988s.The paper concludes that the potential inflation risk should work as an important motivating factor to ensure a faster return to the fiscal consolidation path in Iran, driven by quality of adjustment with appropriate rationalisation of expenditure, rather than waiting for revenue buoyancy following a stronger and durable recovery to do the job automatically.

Keywords:

Seigniorage , Gini coefficient , Unemployment , Minimum Wage Rate