The Effect of Macroeconomic Policies on Poverty in Iran

Abstract

The objective of this study is to analysis the effectiveness of government intervention on poverty groups using a general equilibrium model. The social accounting matrix of year 2002 was used to estimate the GE model. The results indicate that absolute poverty line for the urban and rural regions are 3.7 and 2.4 million Rials respectively. Also the result shows that the majority of Iranian households are living under the poverty line. Thus, it is expected that the average propensity to consume among the households is high but on the other hand the average propensity to save is low.