Monetary economics
Mohammad Feghhi Kashani; Majid Omidi
Abstract
This paper is an endeavor towards investigating the potential role of deposit market structure as a distinct channel for (monetary, fiscal, and regulatory) policy transmission mechanism. In doing so, we have developed the core idea in a rational expectation partial equilibrium setup incorporating the ...
Read More
This paper is an endeavor towards investigating the potential role of deposit market structure as a distinct channel for (monetary, fiscal, and regulatory) policy transmission mechanism. In doing so, we have developed the core idea in a rational expectation partial equilibrium setup incorporating the possibility of contagion risk in the banking system. This has enabled us to build up more sensible analytical findings within a tractable structure which is capable of making diverse equilibria spotted in some empirical evidence. The setup/paper lays down conditions under which one could expect Nash equilibria involving, inter alia, “limited price war”, “deposit rates rat race”, “bank run”, and “systemic banking crisis” followed by incidents of “banking panic”. This multiplicity in equilibria is the result of interaction between the deposit market structural characteristics and policy commands due to externalities originating from strategic complementarity/substitution among the rivalry banks in the market. Further the paper explores the allocation and stabilization efficiency implications in terms of conceivable equilibria for deposit rates, deposit market share, expected net returns, expected markup, and the level of expected effort of banks operating in the banking system with an emphasis on the role of equity capital in between.
Institutional Economics
Maliheh Pourali; Hadi Amiri; Vahid Moghadam; Alireza Kamalian
Abstract
The economy is full of opportunities through which individuals have to decide under different rules. Modeling individuals' behaviors under these additional rules are pursued in experimental economics. The present paper addresses some of the critical institutional questions in governance in the Iranian ...
Read More
The economy is full of opportunities through which individuals have to decide under different rules. Modeling individuals' behaviors under these additional rules are pursued in experimental economics. The present paper addresses some of the critical institutional questions in governance in the Iranian economy, using experimental economics. The data were collected and created out of 480 simulation runs of joint pool resource harvesting where resource users had asymmetric power for harvesting the resource. Alternative institutional arrangements, each representing different governance of natural resources, were simulated in these experiments. This paper concentrates on the three factors of harvesters' communication, the origin of regulations (the harvesters or the government), and rule enforcement (the amount and probability of violators' fines). The results indicate that in the situations where participants are allowed to regulate, harvesting the natural resource is equal to where the government is in charge of regulating. For an external regulation, the worst way to harvest it is when the government fails to guarantee the rule enforcement (the probability of a fine is low). Under such circumstances, resource harvesting is even more unequal than the open-access state. Exogenous regulation leads to crowding-out altruistic motivations.
Saeed Samadi; Mostafa Mobini Dehkordi; Alireza Kamalian; Ehsan Mohammadzade; Mehdi Karname Haghighi
Abstract
One of the important socioeconomic tasks of governments is regulation. Regulation literature focuses on government intervention in the market for regulating the amount of production and distribution of a commodity, which can lead to the determination of the structure and rules governing the market. A ...
Read More
One of the important socioeconomic tasks of governments is regulation. Regulation literature focuses on government intervention in the market for regulating the amount of production and distribution of a commodity, which can lead to the determination of the structure and rules governing the market. A commodities exchange is one of the most important regulatory agencies, which, by providing a convenient, transparent and observable trading system, is customary for the flow of government-specific regulations on commodities. The aim of the present study is to test the regulatory results of supply of products in the commodities exchange. To this end, the percentage increase in the price of 12 commodities traded on the commodities exchange was compared with 21 off-exchange trades using the Propensity Score Matching technique, Caliper and Radius Matching technique, and Bootstrap Standard Deviation. According to the obtained results, the supply of commodities on the Iran mercantile exchange has led to a decrease in their price growth compared to similar commodities outside the Iran mercantile exchange. As a result, using regulatory agencies such as the commodities exchange will increase production and welfare of the society.
