Evaluating the role of intellectual capital in the effect of the productivity impulse on macroeconomic components: the approach of the dynamic equilibrium financial model with an emphasis on recursive preferences

Authors

1 Department of economics, Faculty of economics and management, Shiraz branch, Islamic Azad University, Shiraz, Iran

2 Department of Economic, Faculty of Economic and Management, Shiraz Branch, Islamic Azad University

Abstract

In view of the limitations of recent modeling in Iran's economy, especially in financial economics, where behaviors contrary to economic theories had observed, the gap of participation of intellectual capital in economic models is significant, likewise, the recursive preferences function under rational expectations has been the focus of many financial experts. Due to the fact that modeling such functions requires solving complex mathematical relationships, researchers often refuse to use them. The present study, in the framework of a random dynamic model, tries to analyze the effect of productivity impulse on the macroeconomic components of the country by considering recursive preferences in the household model and presenting the firm model under two types of physical and intellectual capital, emphasizing the role of intellectual capital. The statistical population of this study is Iran's economic data in the period from 1996 to 2017. The model parameters had extracted as a combination of calibration and Bayesian using Dynare package in MATLAB software. The aforementioned general equilibrium model had designed in the form of neoclassical economic theories. Based on the results, the highest average difference between the leveraged returns of physical capital and intellectual capital belongs to the base scenario in which three factors including heterogeneous productivity of capital products, long-term productivity risk and intellectual capital were taken into account. This result shows the importance of the intellectual capital contribution in the model to justify market events and productivity impulse effects. Generally, the results showed that economic realities are explainable only under a recursive preferences function and high relative risk aversion combined with the separation of capital components.

Keywords

References

 
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Journal of Iran's Economic Essays (JIEE)
Volume 18, Issue 35 - Serial Number 35
October 2021
Pages 249-277

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