International Economics
Zahra Aghili; Reza Akbarian; Ahmad Sadraei Javaheri; parviz Rostamzadeh
Abstract
In recent years, given the significance of the financial sector and its interdependence with other sectors, especially the international trade sector, this industry’s academics and planners have examined the impact of financial development on commerce and trade integration. Therefore, in the present ...
Read More
In recent years, given the significance of the financial sector and its interdependence with other sectors, especially the international trade sector, this industry’s academics and planners have examined the impact of financial development on commerce and trade integration. Therefore, in the present study, using the data of 12 selected countries that are members of the Economic Cooperation Organization (ECO), Eurasia, and D8 during the period 1996-2020, and utilizing the augmented gravity model, the effect of a variety of financial tools, such as financial liberalization (FL) and open market operation (OMO), was discussed as a financial development to create trade integration between Iran and the selected countries. The results reveal that the index of financial liberalization has a positive and statistically significant impact on the degree of trade integration of the examined countries. In addition, the elasticity of trade integration is +0.01 than the OMO index. Another independent variable that has a positive effect on trade integration degree is economic size. Income convergence, population, the real exchange rate, and geographical distance have negative significant effects on trade integration in the countries under study. In order to establish the development plans of trade and financial sectors, the findings of this study may be of interest to policymakers and planners in ECO, Eurasia, and D8 nations, especially Iran; because the formation, growth, and strengthening of regional arrangements can offer a foundation for the entry of the region’s countries into the global economy and shield them from globalization’s challenges.
Monetary economics
Abdulhamid Khosravi; Hossein Marzban; Jaafar Ghaderi; Parviz Rostamzadeh
Abstract
In this study, we design a structural macro model for Iran economy in which there is a dual exchange rate regime, namely, official (fixed) and unofficial (floated) rates. The official rate determined by the central bank whereas unofficial rate set in the free market. The structural parameters of the ...
Read More
In this study, we design a structural macro model for Iran economy in which there is a dual exchange rate regime, namely, official (fixed) and unofficial (floated) rates. The official rate determined by the central bank whereas unofficial rate set in the free market. The structural parameters of the designed model is estimated using quarterly data in the 1991- 2019 period, and Bayesian method. The main finding of this paper is that establishing a dual exchange rate regime cannot prevent the negative effects of exchange rate dynamics on macro variables. Therefore, it is better to abandon this strategy and instead, central bank put forward optimal respond to exchange rate dynamics. To do this, we derive an optimal policy rule for the central bank and show that the best policy is assigning equal weights to inflation rate and exchange rate in loss function and an active respond to both inflation rate and exchange rate in the policy rule.
Iman Rousta; Ebrahim Hadian; Ali Hussein Samadi; Parviz Rostamzadeh
Abstract
The purpose of this paper is to investigate the optimal monetary and fiscal policies with emphasis on a non-inflationary exit from economic stagnation in Iran. In the first stage, Iran’s economy has been modeled in the form of a New Keynesian Dynamic Stochastic General Equilibrium model (NK-DSGE). ...
Read More
The purpose of this paper is to investigate the optimal monetary and fiscal policies with emphasis on a non-inflationary exit from economic stagnation in Iran. In the first stage, Iran’s economy has been modeled in the form of a New Keynesian Dynamic Stochastic General Equilibrium model (NK-DSGE). After modeling and extracting the system of equations, the structural parameters of the model have been estimated by using seasonal data from 1989 to 2016 and also the Bayesian approach. The results show that monetary and fiscal expansionary policies increase production though they are associated with inflation. In the second stage, the optimal monetary and fiscal rules have been extracted from a social loss function, and accordingly the conditions of a non-inflationary exit from stagnation have been investigated. The results of the simulation show that the optimal monetary policy cannot by itself lead to the exit of the economy from stagnation without inflation. However, if this policy is applied along with an optimal fiscal policy, a non-inflationary exit from economic stagnation can be achieved.
Parviz Rostamzadeh; Ali Hussein Samadi; Zeinab Yadegar
Abstract
Banking system is considered as one of the most important economic sectors of every country. Because of the dependency between the performances of different sectors in economy, instability in banking sector will lead to disorder in all the other economic sectors. Marketization can influence banking stability. ...
Read More
Banking system is considered as one of the most important economic sectors of every country. Because of the dependency between the performances of different sectors in economy, instability in banking sector will lead to disorder in all the other economic sectors. Marketization can influence banking stability. The primary objective of the present study is to investigate the relationship between marketization and banking stability in Iran. This study investigates the effect of institutional quality on the relationship between marketization and banking stability. Accordingly, the Generalized Method of Moments (GMM) and Panel Threshold Regression (PTR) techniques were used to estimate the models. The results of GMM indicated a decrease in banking stability after marketization. An improvement in institutional quality, however, could improve the relationship between marketization and banking stability. The results obtained by the PTR analysis revealed that institutional quality had a threshold value which could affect the relationship between marketization and banking stability and led to different relationships between marketization and banking stability under different regimes
Hossein Marzban; Parviz Rostamzadeh; Jafar Ghaderi; Abdulhamid Khosravi
Abstract
The purpose of the present research is to investigate the effective channels of the monetary transmission mechanism in Iran. To do so, we devised a New Keynesian Dynamic Stochastic General Equilibrium Model. In our model, the different types of nominal rigidities are introduced beside all the related ...
Read More
The purpose of the present research is to investigate the effective channels of the monetary transmission mechanism in Iran. To do so, we devised a New Keynesian Dynamic Stochastic General Equilibrium Model. In our model, the different types of nominal rigidities are introduced beside all the related structural equations, which are extracted and linearized around a steady state point. Furthermore, to design the DSGE model, two different monetary rules—Taylor and McCallum rules—are used. In other words, the different channels of monetary mechanisms are investigated on the basis of these two rules. To estimate the two mentioned models, seasonal data for the period 1990–2015 are collected. The estimation method used in the study is the Bayesian method. According to the results obtained from variance decomposition, in the Taylor rule-based, q-Tobin, interest rate, wealth and expectation channels are the effective channels in monetary transmission mechanisms; also, in the McCallum rule-based model monetary policy, wealth and expectation channels are the effective channels in monetary transmission mechanisms. In addition, based on the simulation results in the Taylor model, increasing interest rate causes a reduction in output, consumption, investment and capital utilization rate, and in the McCallum model, a positive monetary shock can cause an increase in preceding variables, which is a result of price rigidity.
