This article presents a growth model consistent with economic situation
of Iran. Various sectors of the economy are expressed by certain behavioral
equations. The suggested model, is designed to incorporate findings of the
leading theories of economic growth (Harrod Domar) models, Lewis
structural change theory, and the Solow growth model. The model is
calibrated using statistical data from Iran's first and second five year
development plans. Structurally set dynamic, the model is able to show the
effects of each policy change, on all macroeconomic variables, through the
time.
Application of the model to real world data indicates that the use of an
exhaustible resource is unlikely to foster a long run development. To apply
an open door trade policy, in which the trade impediments, are relaxed,
the model states that the imports of capital goods for appropriate
investment can improve the national welfare of the economy. Productive
investment, both foreign and domestic, is indicated as key factor in saving
the economy from debt crisis
', './data/jte/coversheet/cover_en.jpg'))