s
davood farhadi; hossein ali danesh; Habib Ansari Samani; Hadi keshavarz
Abstract
Over the past decades, the economies of the world have continually experienced economic fluctuations, business cycles, and cycles of boom and recession. Fiscal rules are one of the most important tools of the government with the goal of stabilizing and reducing fluctuations during the business cycle. ...
Read More
Over the past decades, the economies of the world have continually experienced economic fluctuations, business cycles, and cycles of boom and recession. Fiscal rules are one of the most important tools of the government with the goal of stabilizing and reducing fluctuations during the business cycle. It is always the minds of many policymakers who are involved in the question of how a policy should be considered during a period of boom or recession. In fact, policy makers are confronted with the question of whether fiscal rules should be used during business cycles. In response to this question, the present study uses a dynamic stochastic general equilibrium (DSGE) model and modeling the National Development Fund to scenario in two modes of applying counterycyclical fiscal rule and its non-implementation. The findings of the study showed that, in the case of petty impacts, a counterycyclical fiscal rule based on oil revenues has reduced the intensity of fluctuations of macroeconomic variables compared to the absence of a fiscal rule. Also, in the case of monetary impulse, there is not a significant difference in the effectiveness of the implementation of the fiscal rules or its non-implementation.
s
mohamad ali ehsani; hadi keshavarz; Masoud Keshavarz
Volume 7, Issue 26 , February 2017, , Pages 125-144
Abstract
Monetary and fiscal policies are considered of high significance in the economic stabilization policies that are utilized to manage the demand side, but economic experts do not agree upon this policy and its results. This is worthwhile to mention that the source issues in the agreement or disagreement ...
Read More
Monetary and fiscal policies are considered of high significance in the economic stabilization policies that are utilized to manage the demand side, but economic experts do not agree upon this policy and its results. This is worthwhile to mention that the source issues in the agreement or disagreement with this policy are the differences of opinions about the effects of this policy on the economy. This study attempts to investigate the effects of monetary and fiscal policies on the labor market fluctuations via the adjustment to the new Keynesian dynamic stochastic general equilibrium model in Iranian economy. After estimating the model using Bayesian approach, the model was simulated. The results of variance decomposition show that government employment was the largest role in explaining the fluctuations in unemployment and monetary shocks play the most important role in private sector employment. Impulser response functions also show that monetary shock, government employment shock and oil revenues shock reduce the total unemployment
