Research Paper
Monetary economics
Marziyeh Esfandiari; Zohreh Esksndaripour; Nazar Dahmardeh; Mohammad Hasan Fotros
Abstract
The role and importance of the banking system as the primary source of financing for businesses is necessary to investigate the factors affecting the profitability of this sector. Therefore, this research uses a computable general equilibrium model (RDCGE), the effect of exchange rate shock, crude oil ...
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The role and importance of the banking system as the primary source of financing for businesses is necessary to investigate the factors affecting the profitability of this sector. Therefore, this research uses a computable general equilibrium model (RDCGE), the effect of exchange rate shock, crude oil price, stock price index, and government budget on Iran's banking system profitability. For this purpose, the social accounting matrix (SAM) of 2011 and the Input-Output table of 2016 were used to analyze the twelve design scenarios and the profitability of the banking system in response to shocks 2, 5, and 10 percent in the exchange rate, crude oil price, stock price index, and government budget are evaluated. The findings reveal that the exchange rate and crude oil prices negatively affect banking system profitability, while the total stock price index and government budget have positive effects. The funding comparison shows that in different scenarios, the shocks of the exchange rate, oil price, stock market, and government budget, respectively have the most effect on bank profitability. thus , appropriate use of the national development fund and government support for the stock market are effective for reducing exchange rate shock and crude oil prices and controlling the consequences of these shocks .
Research Paper
Monetary economics
Hosein Samsami; Hesam Hasanpour; Mohammad Ali Nowjavan
Abstract
As a result of the accumulation of fictitious assets in the bank balance sheet, the banking system has been faced with insolvency in recent years which has had grave impacts on both the money and real sectors. This study aims to investigate the causes of the increase in liquidity through the creation ...
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As a result of the accumulation of fictitious assets in the bank balance sheet, the banking system has been faced with insolvency in recent years which has had grave impacts on both the money and real sectors. This study aims to investigate the causes of the increase in liquidity through the creation of fictitious assets and to examine the effects of these assets on macroeconomic variables, which has not been investigated in other studies. Using a pattern of structural macro-econometric and the ARDL method, this paper investigates the impact of removing fictitious assets from the bank balance sheet on the money supply and other macroeconomic variables in Iran from the first season of 2006 to the fourth season of 2022. The designed macro-econometric pattern includes 8 behavioral equations and 7 identity equations. Two scenarios have been developed in this paper: The first scenario surveys the impact of effective money (the aggregate money minus fictitious assets) on macroeconomic variables. The second scenario examines the impact of aggregate money on macroeconomic variables. The findings indicate that the existence of fictitious assets in the bank balance sheet causes an increase in the money supply and reduces the quality of money. However, fictitious assets have no impact on the real sector and the effective money’s influence on macroeconomic variables such as production, investment, employment, and consumption is more than the aggregate money’s impact on these variables. Also, the results show that ineffective money merely increases the price levels.
Research Paper
Monetary economics
Mahboobeh khadem Nematollahy; Teymour Mohammadi; Abbas Shakeri; Ali Asghar Salem
Abstract
This study examines the impacts of demand, supply, exchange rate, and unconventional monetary policy (UMP) shocks on GDP, inflation, exchange rate, and interest rate in Iran. Using sign-restriction, short-run zero-restriction, and long-run zero-restriction inside vector autoregressive frameworks, we ...
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This study examines the impacts of demand, supply, exchange rate, and unconventional monetary policy (UMP) shocks on GDP, inflation, exchange rate, and interest rate in Iran. Using sign-restriction, short-run zero-restriction, and long-run zero-restriction inside vector autoregressive frameworks, we constructed three- and four-variable models incorporating real interest rate, real exchange rate, GDP, and inflation data spanning from 1961-Q1 to 2021-Q1. We executed a bootstrap resampling technique that satisfies the signs on loops. Our findings indicate that an unconventional monetary policy, particularly a negative monetary policy shock, results in an increase in GDP and a reduction in the real exchange rate, so significantly reducing inflation. An unconventional monetary policy may be implemented to stimulate the economy. Consequently, the novel combined approach facilitates the identification of unconventional monetary policy shocks and can be broadly applied to other economic shocks. The primary question of the study is whether UMP shocks in Iran can be estimated and identified through zero and sign restrictions. The study aims to identify UMP shocks by regressing a collection of variables pertinent to the decisions of the Central Bank of Iran (CBI).Introducing UMP in emerging market and developing economies (EMDEs) such as Iran aims to attainin their output and inflation targets
Research Paper
, Behavioral Economics
Hamid Reza Izadi
Abstract
The utility function and consumption behavior within a society wield profound influence over both household conduct and broader macroeconomic dynamics, thereby exerting a pivotal role in fostering economic growth and prosperity. Consequently, the examination and analysis of household consumption behavior ...
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The utility function and consumption behavior within a society wield profound influence over both household conduct and broader macroeconomic dynamics, thereby exerting a pivotal role in fostering economic growth and prosperity. Consequently, the examination and analysis of household consumption behavior stand as a cornerstone in economic inquiry and policy formulation. This study employs a Dynamic Stochastic General Equilibrium (DSGE) model to emulate, scrutinize, and elucidate the intricacies of household macroeconomic variables, particularly delving into the repercussions of economic perturbations while considering shifts in household budget constraints. Utilizing statistical data spanning the period from 1977 to 2020, this research introduces three distinct models to underscore the gravity of the subject matter. The empirical findings from our investigation reveal an intriguing outcome: when subjected to alterations in the utility function governing consumption behavior, all three models exhibited remarkably similar responses to the ensuing shock. Notably, the second model demonstrated the least volatility in consumption fluctuations, concurrently displaying the highest degree of serial correlation with the consumption variable. Conversely, the third model displayed the most pronounced interplay between production and consumption variables, as evidenced by our comparative analysis of consumption variable changes across the trio of models proffered herein. This study delves into the intricate nexus of utility functions and household consumption behavior, offering invaluable insights into the macroeconomic underpinnings that shape our societies.
