Mehdi Hadian; Hassan Dargahi
Abstract
The aim of this study is to investigate the role of macroeconomic policies in the financial stability of Iran’s economy. Based on Dynamic Stochastic General Equilibrium models, a model capable of tracing interactions between the real and the financial sectors has been constructed. In the financial ...
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The aim of this study is to investigate the role of macroeconomic policies in the financial stability of Iran’s economy. Based on Dynamic Stochastic General Equilibrium models, a model capable of tracing interactions between the real and the financial sectors has been constructed. In the financial modeling, the characteristics of Iran banking system, such as NPLs and frozen assets, have been incorporated. The results of simulations based on quarterly data of Iran economy during 1990-2014 show that stabilization policies are able to restrict financial vulnerabilities by reducing the fluctuations of the real sector variables. As a result, the stability of the real sector is a prerequisite for the stability of the financial sectors. Also due to the financial and real sector communications, the effects of declining vulnerabilities of the financial sector enhance the impacts of stabilization policies in the real sector. These effects result in the improvement of macroeconomic environment and increase in social welfare.
Mehdi Yazdani; Hassan Dargahi; Roghayeh Akbari Afrouzi
Abstract
In general, the main objective of monetary policies is to stabilize the key macroeconomic variables, especially the inflation around its target. However, the role of some variables such as the real exchange rate can be important in optimal monetary policy responses to commodity terms of trade shocks ...
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In general, the main objective of monetary policies is to stabilize the key macroeconomic variables, especially the inflation around its target. However, the role of some variables such as the real exchange rate can be important in optimal monetary policy responses to commodity terms of trade shocks in commodity dependent emerging market economies, such as oil-exporting countries. This study tries to examine the impacts of different monetary policy in order to minimize the adverse effects of the economic shocks, by considering the real exchange rate gap into the flexible inflation targeting rule, in the Iranian economy. Hence, using a new Keynesian model, the demand and Phillips curves are estimated by autoregressive distributed lags (ARDL) method, based on the quarterly data during 1991:Q1-2014:Q4 and then a loss function for the central bank is minimized subject to above equations, by using the optimal control approach. According to the results, when the real exchange rate gap is calculated based on the lower targets, existence of this variable in the loss function of the monetary authorities lead to lower losses. But the higher real exchange rate gap is accompanied by higher losses. For summary, dependent on the real exchange rate gap, the monetary author can use the target of the exchange rate as a policy target. However, the flexible inflation targeting monetary framework, with regards to real exchange rate targeting, is not optimal policy in case of more rigid exchange rate regimes.
Hassan Dargahi; Mohammadreza Mazloumpour
Volume 19, Issue 61 , February 2015, , Pages 31-62
Abstract
The Impact of micro-credits on household’s poverty gap is considered as one of the most important social and economic issues. In this research, the socio- economic characteristics of the borrowing households are identified by using a Logit model, based on the urban and rural household budget survey ...
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The Impact of micro-credits on household’s poverty gap is considered as one of the most important social and economic issues. In this research, the socio- economic characteristics of the borrowing households are identified by using a Logit model, based on the urban and rural household budget survey data for 2011. Then, the impact of micro-credits on poverty gap of poor households is examined by estimating regression models. The result of the Probit analysis indicates that the coefficients of the age of household head, employment of the household head, household size, and urbanization are significantly positively related to households’ access to credit. However, the coefficient of household expenditure is negatively related to households’ access to credit. This implies that the low-income household is more likely to have not access to micro-credits. Also, the regression analysis shows that the access to micro-credits is not a significant explanatory variable for poverty gap of the poor households. This indicates the micro-credits has no impact on the poverty reduction of the poor households.
