Document Type : Original Article
Authors
1
Assistant Professor of Economics, Department of Economics Faculty of Economics and Social Science, Bu-Ali Sina University, Hamedan, Iran
2
Bu-Ali Sina UniversityAssistant Professor of Economics, Department of Economics Faculty of Economics and Social Science, Bu-Ali Sina University, Hamedan, Iran
3
M.Sc. of Economics, Bu-Ali Sina University, Hamedan, Iran
Abstract
In addition to having extensive social dimensions, poverty also has undesirable economic consequences, and adopting policies to reduce it has always been at the forefront of economic issues at the macro level. According to the teachings of Islamic economics, justice in income distribution and combating poverty should be one of the basic pillars of policymaking, while examining this indicator in selected Islamic countries indicates its unfavorable situation compared to developed economies. Previous studies have analyzed the factors affecting this phenomenon from various angles, but the lack of research based on analyzing the effect of the knowledge-based economy on the poverty index is evident. Also, past studies have often considered the income poverty index in their analyses and have paid less attention to newer indicators that also pay attention to its capability dimensions. Therefore, the present study aims to investigate the long-term and short-term effects of economic complexity on the capability poverty index in D8 countries using a panel data model based on the PMG approach during the period 1997-2024. The results show that in the long-run equation, economic complexity has a negative and significant effect on capability poverty in the countries under study, and for each unit increase in the economic complexity index, capability poverty decreases by 21.2 units. Also, the effect of inflation and unemployment on capability poverty has been evaluated as positive, which is in accordance with economic theories. Fluctuations in economic growth, as one of the factors of economic instability, have also had a positive effect on the capability poverty index. Based on the research findings, adopting policies that strengthen the knowledge-based economy in selected Islamic countries is recommended to combat the problem of poverty. In addition, combating inflation and reducing the unemployment rate can lead to a reduction in capability poverty in these countries. Also, adopting policies that stabilize the economic growth rate and avoid fluctuations in it helps to improve the poverty situation.
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