Government Monetary and Fiscal Policies Effects on Economic and Social Duality in Iran

Abstract

In developing countries, governments are administrators of investment in various economic sectors. In fact the share of government in economic system is very bigger than the private sector. Government policies have very deep influence on investment in the various economic sectors. With this point the study explores the role of the government monetary and fiscal policies in decrease or increase of economic duality in Iran. For this aim data of 1973-2003 was used. The study model was Seemingly Unrelated Regressions (SUR). The results showed that the government monetary and fiscal policies are not the significant difference in investment between agriculture, industry and service sectors. Therefore, the government monetary and fiscal policies aren’t causes of the sectoral duality, On the other hand we couldn’t find the significant difference between investment in industry and service sectors with investment in agricultural sector. Thus, the government policies aren’t causes of increasing in duality between rural and urban areas.