The effect of inflation targeting and money growth rate on banks' balance sheets during Covid-19

Document Type : Research Paper

Author

Department of banking studies, Monetary and banking research institute, Tehran, Iran.

Abstract

This article explores the effects of inflation targeting and money growth rate targeting on the balance sheets of Iranian banks during the COVID-19 pandemic. To achieve this, the study focuses on three key objectives using annual macroeconomic and banking sector data from a developing oil-exporting country, employing the Bayesian method and a DSGE model. First, the macroeconomic and balance sheet impacts of the COVID-19 pandemic are examined without the use of inflation targeting or money growth rate targeting policies. Second, the effects of COVID-19 are analyzed in conjunction with inflation targeting, and third, the effects of COVID-19 are studied alongside money growth rate targeting. The primary shocks examined in this paper are the COVID-19 shock, the inflation targeting shock, and the money growth rate targeting shock. To assess the impact of these shocks on macroeconomic variables and the balance sheets of banks, reaction function analysis has been employed.The key findings reveal that the negative effects of COVID-19 are exacerbated by targeting policies. During the spread of the epidemic, the use of these targeting strategies further decreases production and investment compared to scenarios without such policies. Moreover, inflation targeting, in particular, has a more pronounced effect on reducing production and investment than money growth rate targeting. Based on these findings, it is recommended that the central bank considers implementing interest rate targeting alongside inflation and money growth rate targeting policies in order to better support the balance sheets of banks and mitigate the negative effects on the broader economy.   
 

Keywords

Main Subjects


Article Title [Persian]

اثر هدف‌گذاری تورم و نرخ رشد پول بر ترازنامه‌های بانک‌ها در دوران کووید-۱۹

Author [Persian]

  • اعظم احمدیان
گروه بانکداری، پژوهشکده پولی و بانکی، تهران، ایران.
Abstract [Persian]

این مقاله به بررسی تأثیرات هدف‌گذاری تورم و هدف‌گذاری نرخ رشد پول بر ترازنامه‌های بانک‌های ایرانی در دوران همه‌گیری کووید-19 می‌پردازد. برای دستیابی به این هدف، مطالعه بر سه هدف کلیدی با استفاده از داده‌های سالانه اقتصاد کلان و بخش بانکی از یک کشور در حال توسعه صادرکننده نفت، با بهره‌گیری از روش بیزی و مدل تعادل عمومی پویای تصادفی متمرکز است. اول، تأثیرات اقتصاد کلان و ترازنامه‌ای همه‌گیری کووید-19 بدون استفاده از سیاست‌های هدف‌گذاری تورم یا هدف‌گذاری نرخ رشد پول بررسی می‌شود. دوم، تأثیرات کووید-19 همراه با هدف‌گذاری تورم تحلیل می‌شود و سوم، تأثیرات کووید-19 در کنار هدف‌گذاری نرخ رشد پول مطالعه می‌شود. شوک‌های اصلی بررسی شده در این مقاله شامل شوک کووید-19 ، شوک هدف‌گذاری تورم و شوک هدف‌گذاری نرخ رشد پول هستند. برای ارزیابی تأثیر این شوک‌ها بر متغیرهای اقتصاد کلان و ترازنامه‌های بانک‌ها، از تحلیل تابع واکنش استفاده شده است. یافته‌های کلیدی نشان می‌دهند که اثرات منفی کووید-19 با سیاست‌های هدف‌گذاری تشدید می‌شود. در طول گسترش همه‌گیری، استفاده از این استراتژی‌های هدف‌گذاری تولید و سرمایه‌گذاری را بیشتر از سناریوهای بدون چنین سیاست‌هایی کاهش می‌دهد. علاوه بر این، هدف‌گذاری تورم به‌ویژه تأثیر بیشتری بر کاهش تولید و سرمایه‌گذاری نسبت به هدف‌گذاری نرخ رشد پول دارد. بر اساس این یافته‌ها، توصیه می‌شود که بانک مرکزی در نظر بگیرد که هدف‌گذاری نرخ بهره را در کنار سیاست‌های هدف‌گذاری تورم و نرخ رشد پول به منظور حمایت بهتر از ترازنامه‌های بانک‌ها و کاهش اثرات منفی بر اقتصاد کلان اجرا کند.

Keywords [Persian]

  • هدف گذاری نرخ رشد پول
  • هدف گذاری تورم
  • کووید-19
  • DSGE
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