The Effect of Globalization and Economic Growth on Poverty in Iran

Globalization is considered as an important topic nowadays. Some economists believe that globalization will lead to create a stable economy for poor and developing countries and ultimately to promote economic welfare and their growth. In contrast, some economists oppose this idea.  The impact of globalization on the major economic problems of these countries, especially poverty and income distribution is considered as one of the most important issues for developing countries.Therefore, this study aims to examine the relationship between globalization and economic growth with poverty in Iran during the period of 1982-2016. For this purpose, this relationship has been tested using the comprehensive KOF Globalization Index and econometric techniques including the Johansson-Juselius method and the error correction model. The KOF Index covers three important economic, social and political aspects. The results of the model's estimation show that globalization and economic growth have a positive and significant effect on poverty, and with increase in these two coefficients through increasing the exports, which leads to economic growth and investment attraction that results from globalization, will reduce poverty and inequality in the country. The error correction coefficient indicates the high speed of the imbalance adjustment in the short term and the desire for long-term equilibrium.