Seyed Reza Nakhli; Monireh Rafat; Rasul Bakhshi Dastjerdi; Meysam Rafei
Abstract
Since the nationalization of the oil industry, especially after the 1979 revolution, Iran has always encountered economic sanctions. The oil embargo and international financial sanctions are the most severe sanctions imposed on Iran and have had significant effects on Iran’s macroeconomic variables. ...
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Since the nationalization of the oil industry, especially after the 1979 revolution, Iran has always encountered economic sanctions. The oil embargo and international financial sanctions are the most severe sanctions imposed on Iran and have had significant effects on Iran’s macroeconomic variables. The current study aimed to analyze the effects of economic sanctions on Iran’s macroeconomic variables using a dynamic stochastic general equilibrium (DSGE) model based on the new Keynesianapproach. The simulation results showed that the intensification of the oil and international financial sanctions would 1) reduce foreign and government investment, technology innovation,export in the oil sector, and consequently oil production, 2) lead to a higher exchange rate and a decrease in the ratio of the central bank foreign exchange reserves to the monetary base, 3)reduce the GDP and non-oil exports and increase the inflation, which may cause stagflation, 4) increase household consumption and decrease household investment, 5) increase budget deficit, forcing the government to adopt policies to raise current expenditures and maintain housing and urban developmentbudget, which, in turn, will lead to a budget deficit and bond sales. The analysis of various optimal monetary policies in the context of economic sanctions and considering the contingent business interruption (CBI) loss function showed that the optimal simple rule, in the form of the producer price index, targeting monetary policy, could reduce the loss function and increase the importance value of output coefficient in themonetary policy.
Seyed Reza Miraskari; Seyed Komail Tayebi; Mohammad Vaez Barzani
Abstract
This paper tries to analyze the impacts of intermediate goods trade on production, consumption, investment, net exports, employment, labor wage and capital rent of Iran in its bilateral trade relations with China. This analysis has been done by modeling, solving and calibrating an international real ...
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This paper tries to analyze the impacts of intermediate goods trade on production, consumption, investment, net exports, employment, labor wage and capital rent of Iran in its bilateral trade relations with China. This analysis has been done by modeling, solving and calibrating an international real business cycles (IRBC) model in period 1980-2009. The results show that when elasticity of substitution between domestic and imported intermediate goods is low, increasing the share of Iran’s imported intermediate goods from China increases volatility of Iran’s macroeconomic variables. The value of an increase in volatility of Iran’s macroeconomic variables depends on elasticity of substitution between domestic and imported intermediate goods, when the elasticity of substitution between domestic and imported intermediate goods is low, an increase in the share of Iran’s imported intermediate goods from China leads to a further increase in the volatility of macroeconomic variables. These results indicate that imports of intermediate goods are an important path through for transmission of shocks between main bilateral trade partners.
Ali Hussein Samadi; Ali Hussein Ostadzad
Abstract
Abstract The main purpose of this paper is to obtain the optimal amount of expenses of government relating to the protection of property rights (PPRs). To achieve these purposes we have introduced concept of social intelligence with respect to PPRs and then developed different growth model from existing ...
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Abstract The main purpose of this paper is to obtain the optimal amount of expenses of government relating to the protection of property rights (PPRs). To achieve these purposes we have introduced concept of social intelligence with respect to PPRs and then developed different growth model from existing literature. In the second step the optimal share of government spending on the PPRs is calculated. The theoretical results show inverse relationship between budget deficits and government spending in the PPRs. In other words, with increasing amount of government deficit, government reduced spending of PPRs. The results of calibration for Iranian economy show that, the growth rate of spending to PPRs should be equal to 31 percent for having sustainable economic growth rate of 6 percent.
