Calibration of Precautionary Saving Models for Iran Economy

Seyyed Aqil Hoseiny (), Mohammad Vaez Barzani (), Rasoul Bakhshi Dastjerdi () and Afshin Parvardeh ()
Additional contact information
Seyyed Aqil Hoseiny: Assistant Professor of Economics, Yasouj University
Mohammad Vaez Barzani: Associate Professor of Economics University of Isfahan
Rasoul Bakhshi Dastjerdi: Associate Professor of Economics University of Isfahan
Afshin Parvardeh: Associate Professor of Statistics, University of Isfahan

Quarterly Journal of Applied Theories of Economics, 2018, vol. 5, issue 3, 213-238

Abstract: The main question of this paper is that which interest rate value assures existence and optimality of equilibrium, in an environment that we have only precautionary demand for money and assets. This environment has two properties: heterogeneous agents and incomplete markets. In this environment, agents hold precautionary savings (in form of a single asset such as fiat currency, credit, and capital) for self-insurancing themselves against idiosyncratic income fluctuations. Bewley models are formed in this environment. In this paper, we calibrate this model for Iran economy and show that when agents have access to the fiat currency or credit, these results are true. The main question of this paper is that which interest rate value assures existence and optimality of equilibrium, in an environment that we have only precautionary demand for money and assets. This environment has two properties: heterogeneous agents and incomplete markets. In this environment, agents hold precautionary savings (in form of a single asset such as fiat currency, credit, and capital) for self-insurancing themselves against idiosyncratic income fluctuations. Bewley models are formed in this environment. In this paper, we calibrate this model for Iran economy and show that when agents have access to the fiat currency or credit, these results are true.

Keywords: Interest rate; Monetary equilibrium; Self-insurancing; Bewley models (search for similar items in EconPapers)
JEL-codes: C63 E21 E43 (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://ecoj.tabrizu.ac.ir/article_7961_8f73d7c5d1405c56fa96f4200939d1ee.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:qjatoe:0123

Access Statistics for this article

Quarterly Journal of Applied Theories of Economics is currently edited by Sakineh Sojoodi

More articles in Quarterly Journal of Applied Theories of Economics from Faculty of Economics, Management and Business, University of Tabriz Contact information at EDIRC.
Bibliographic data for series maintained by Sakineh Sojoodi ().