World-System (1960-2010): Iran as a Neoclassical Economy
It might seem paradoxical or even foolish to apply a Neoclassical Economic Model to Iran: Free markets for Products, Capital and Labor? Exogenous Total Factor Productivity Growth (Technology)? Iran is generally considered a mixed , centrally planned economy with a large public sector ( here ). But what is easy to forget is the long period of attempted US domination prior to the Iranian Revolution in 1978-1979 . The US, especially in the Kennedy administration , was trying to Modernize Iran and transform it into a model Capitalist System . They failed and brought on the Iranian Revolution and the current Anti-Modern Theocracy . In any event, I always test a Neoclassical Economic Model as one of the competitor models when I estimate the best State Space model for a particular country. The causal model is presented above as a directed graph (see the Symbols defined in Notes below). The graphic is b...