Short-Run and Long-Run Effects of Monetary Policy on GDP in Iran
Reza Gholami Jamkarani (),
Ali Laalbar and
Abbas Rezazadeh Karsalari
International Journal of Academic Research in Accounting, Finance and Management Sciences, 2016, vol. 6, issue 3, 89-95
In this paper, we investigated the short-run and long-run effects of monetary policy on GDP have been investigated by co-integration analysis in Iran economy during the period 1972-2015. We used Johansen cointegration methods to demonstrate long-term relationship between the variables. The results showed that the Contractionary monetary shocks, has low effects on output whereas the effects of expansionary monetary shocks are neutral. The effects of expansionary monetary shocks after a first lag have significant effects on increasing output. Among the control variables, the investment ratio, inflation, government expenditures, oil revenues and coefficient of exchange rate have significant expected effects on production growth. In addition, there is a long-run relationship between money supply, inflation and output.
Keywords: Monetary policy; GDP; Iran economy; co-integration test (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:hur:ijaraf:v:6:y:2016:i:3:p:89-95
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