Water Utilization Rate

Abstract

In economic growth models, less attention is paid to natural resources and their importance on economic growth. The decline of the world's water resources, especially in countries with inherently limited water resources, such as Iran, has caused a water supply and demand crisis. This chapter deals with the effect of water utilization rate on economic growth. The hypothesis of this research is based on Barrow and Sala's Martin model developed by Barber. According to this model, the effect of the water utilization rate on economic growth can be nonlinear. The tool for measuring the amount of water in this study is the water utilization rate. Other explanatory variables used in the model include the share of water exports, the share of water activities, and the share of gross capital. This chapter uses a self-regression model with distributive interruption with the shore test approach for 1990-2020 for Iran. The estimation results indicate that the relationship between water utilization rate and economic growth for Iran is inversely U-shaped.