Evaluation of Effects of Monetary Policy on Iranian Economy In a Monetary Business Cycle Framework (in Persian)

Sayyed Fakhrodin Fakhrhosseini ()
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Sayyed Fakhrodin Fakhrhosseini: Iran

Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), 2013, vol. 6, issue 14, 111-132

Abstract: The Dynamic Stochastic General Equilibrium (DSGE) model has developed the bases for macroeconomic policies. The main aim in this research has been to introduce a DSGE model corresponding to the developing economy of Iran and then to evaluate the effects of monetary policy in the framework of business cycles. The data in this article are related to the fixed prices in the year 2004 and run annually from 1966 to 2008 on a per capita basis. Thus, we have developed a DSGE model for Iran and we have seen that the shock of monetary growth rate increases inflation and its effect on the real variables such output and employment is very low in Iran. In other words, the money is neutral in a non-sticky price framework. Moreover, oil revenue shocks injected through monetary channel will increase inflation (nearly 0.6 percent deviation from the steady state). Otherwise, the net assets of the central bank will not change and the inflation will raise a little. JEL Classification Codes: E31, E32, E52

Keywords: Dynamic Stochastic General Equilibrium; Monetary policy; Business cycles; Inflation; Iran (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 (search for similar items in EconPapers)
Date: 2013
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