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With regard to the role of fiscal policy in reducing the financial crises, determining the magnitude of the fiscal policy multiplier after the 2007-2008 global crisis became one of the most challenging issues in the field of fiscal policy. In general, the magnitude of the fiscal policy multiplier is estimated larger than one according to the Keynesian viewpoint and smaller than one based on neoclassical viewpoint. The difference in the magnitude of the multiplier comes from the fact that economists believe that the fiscal policy multiplier is influenced by the degree of economic openness, the exchange rate regime, the way monetary policy is applied and the business cycle. Differences about the magnitude of the fiscal policy multiplier among schools of economic thought are evident in both theoretical and empirical dimensions. In this regard, this paper tries to estimate fiscal policy multiplier using structural vector autoregressive model (Blanchard and Peroti, 2002 method and Markov switching approach (Hall, 2009) using the seasonal data for Iran during the period (1990: 1-2017:3). The results of the structural vector autoregressive model showed that the instantaneous multiplier, 10-quarter cumulative multiplier, and the 20-quarter cumulative multiplier of the government expenditure were equal to 0.281, 0.304, and 0.445, respectively. In addition, the corresponding multipliers for taxes were -0. 079, - 0.107 and - 0.171, respectively. Since the fiscal policy multiplier varies based on the economic conditions, the results of the nonlinear Markov switching model showed that the government expenditure multiplier during the recession is 0.828 and it is larger than the same coefficient during the boom period (0.108), on one hand. On the other hand, the tax multiplier during the boom period (-0.194) is larger than its value during the period of recession (-0.092 ).
 

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For more than a century, the causal relationship between government size and economic growth has been a challenging issue in the public sector economics. However, there is no theoretical or empirical consensus among economists on this issue. Accordingly, it seems that the best way to resolve these theoretical and empirical contradictions is experimentally investigation the causal relationship between government size and economic growth in each country. Therefore, this paper investigates the causal relationship between government size and economic growth using the Markov-Switching Granger Causality Approach in Iran over the period 1967-2017. The findings confirmed the existence of a non-linear causal relationship between government size and economic growth and showed that government size had a significant negative effect on economic growth in the form of a two-regime structure (regime Zero: 1966-2002 and regime one:1983-1987), although this negative effect was greater in regime one than in regime zero. This larger negative effect can be rooted in the fact that the share of current expenditure in total government expenditure was significantly larger in the years related to regime one (compared to regime zero). Finally, contrary to Wagner's law, Findings did not confirm the positive and significant effect of economic growth on government size in Iranian economy.

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The role of money in the design and implementation of monetary policies for price stability, especially since 2007-2009 global financial crisis, has been reintroduced as a major policy issue in both developed and developing countries. In this regard, the money demand function is one of the most important components of any monetary system, which plays a decisive role in the mechanism of transfer of monetary policy to the real sector of the economy. Therefore, in order to analyze monetary issues and to provide appropriate solutions for overcoming economic problems, it is necessary for the policymaker to have a correct understanding of the money demand function. This paper answers the question of whether sudden changes in money supply cause instability in money demand function. Hence, the present study, with Markov switching approach and using simple sum and Divisia, estimates the demand for money function in the Iranian economy during 1988q2 -2020q2 and evaluates its stability. The results indicate that demand for money function is stable in regime one but being in regime two and three, namely the average growth of money and the sharp growth of money, has led to instability in the demand for money function, and the diversion of the monetary policy objectives.

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