Macroeconomics
Abdorasoul Sadeghi; Hossein Marzban; Ali Hossein Samadi; Karim Azarbaiejani
Abstract
The unstable state of macroeconomic indicators such as gross domestic product (GDP), investment, and inflation rate, as well as the disproportionate level of high volume of cash held by private individuals versus the low volume of liquidity in manufacturing firms, have always been a significant problem ...
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The unstable state of macroeconomic indicators such as gross domestic product (GDP), investment, and inflation rate, as well as the disproportionate level of high volume of cash held by private individuals versus the low volume of liquidity in manufacturing firms, have always been a significant problem in Iran's economy. In this respect, the relationship among the stock market, bank deposits, and speculation in the foreign exchange market, and also, the central bank's role in directing liquidity between them to affect the macroeconomic indicators are important. The current study evaluates this subject for 1988–2018 using a system of simultaneous equations and the three-stage least squares (3SLS) method. The findings indicate that there has been a significant negative relationship among the stock market, bank deposits, and foreign exchange speculation. The stock market and bank deposits have had a significant positive effect on investment and GDP, and in contrast, foreign exchange speculation has shown a significant negative impact. Conversely, bank deposits have negatively impacted the consumer price index (CPI), whereas foreign exchange speculation has shown a substantial direct effect. Finally, despite the existence of a significant negative relationship between three financial markets in the Iranian economy confirmed by the obtained results, the central bank has forfeited a considerable portion of its potential effectiveness in directing liquidity between parallel financial markets to affect nominal and real economic indicators due to interest rate repression.
Soheila Parvin; Abbas Shakeri; Azam Ahmadian
Volume 19, Issue 58 , April 2014, , Pages 77-115
Abstract
In the area of monetary policy, interest rate is regarded as a direct monetary instrument and required reserve ratio is as an indirect monetary instrument which in Iran, they are enforced by the monetary authorities to the banking system and will affect its behavior. In this paper, we study the balance ...
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In the area of monetary policy, interest rate is regarded as a direct monetary instrument and required reserve ratio is as an indirect monetary instrument which in Iran, they are enforced by the monetary authorities to the banking system and will affect its behavior. In this paper, we study the balance sheet effects of the two policies using financial statements data of banking system, System of National Accounts and New Keynesian Stochastic Dynamic General Equilibrium model taking advantage of the statistics for the period 1981-2012. Calibration methodology is used to compute the parameters of DSGE model . We analysis Impulse Response functions and the first and second moments. Results show that an interest rate positive shock by one standard deviation causes the deposits and loans to be, respectively, about 8 and 25 percent higher than the steady state. On the other hand, a positive shock of required reserve ratio by one standard deviation has an impact opposite to the effect of an increase in banking interest rate on the balance sheet. Hence, the consequence of a positive interest rate shock is an increase in output and reduction in inflation and the consequence of shock relative to the required reserve ratio is a decrease in output and an increase in inflation.
Gholamhossein Parivash; Mohammad Bakhshoodeh
Volume 9, Issue 31 , July 2007, , Pages 151-163
Abstract
The main objective of this study is to assess the effects of monetarypolicies on consumption behaviors of rural households in Iran, using the Euler equations and OLS and IV(Instrumental Variable) estimation methods. Results show that there is no relationship between consumption growth of rural households ...
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The main objective of this study is to assess the effects of monetarypolicies on consumption behaviors of rural households in Iran, using the Euler equations and OLS and IV(Instrumental Variable) estimation methods. Results show that there is no relationship between consumption growth of rural households and interest rate. In other words, there are no interactions between monetary policies and rural households' consumption. Also, rural consumption was limited more by credit availability than interest rate. Furthermore, precautionary savings is noticeable among rural households.
