Positive Mathematical Programming Approach

Davar Sanaee (), Akbar Mirzapour Babajan (), Beitollah Akbari Moghadam () and Majid Feshari ()
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Davar Sanaee: Ph.D. Candidate in Economics, Department of Economics, Qazvin Branch, Islamic Azad University, Qazvin, Iran
Akbar Mirzapour Babajan: Assistant Professor of Economics, Department of Economics, Qazvin Branch, Islamic Azad University, Qazvin, Iran (Corresponding Author)
Beitollah Akbari Moghadam: Assistant Professor of Economics, Department of Economics, Qazvin Branch, Islamic Azad University, Qazvin, Iran
Majid Feshari: Associate Professor of Economics, Kharazmi University, Tehran, Iran

Quarterly Journal of Applied Theories of Economics, 2020, vol. 6, issue 4, 217-250

Abstract: The main purpose of this paper is to investigate the effect of monetary policy on the value added in the basic metal Industries sector is based on the use of positive mathematical programming during the periode of 1990 - 2017. For achieving this, at first the long-run relationship between variables has been estimated by using of ARDL approach and then, the scenario designing and sensitivity analysis has been implemented through PMP model.The results of this study showed that the decreasing and incremental policies of monetary variables (liquidity and bank interest rate) in different scenarios have an effect on the added value of optimizing that subsection. Also, an important indicator of this method is to calculate the optimal value added of each sub-section in its base year and its targeting capability in some other scenarios. For example, in the first scenario, in the case of 5, 10, and 20 percent reduction in liquidity, value added will increase by 4, 9 and 18 percent in Basic Material Production industries. In this scenario, the drop in the policy variable will also increase the bank interest rate by as much as 3, 7 and 15 percent in the added value

Keywords: Monetary policy; Value added; Basic Metal production Industries; Positive Mathematical Programming Approach (PMP). (search for similar items in EconPapers)
JEL-codes: C10 E52 L60 (search for similar items in EconPapers)
Date: 2020
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