mahdiye ramedoust; rooya Alomran; Hossein Panahian; Hossein Asgharpour
Abstract
Controlling inflation and economic growth is one of the most important economic goals that governments seek to achieve through tools such as monetary policy. To achieve their policy goals, monetary policymakers need to have a careful assessment of the effectiveness of monetary policy in the short and ...
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Controlling inflation and economic growth is one of the most important economic goals that governments seek to achieve through tools such as monetary policy. To achieve their policy goals, monetary policymakers need to have a careful assessment of the effectiveness of monetary policy in the short and long term. The purpose of this study is to investigate the effect of asymmetric shocks of monetary policy on inflation and real output variables in the period 1994:1-2016: 4 using the NARDL technique. The results of the study showed that only positive liquidity shock has a positive and significant effect on GDP and its negative shock has no significant effect on GDP in the long run. Also, according to the results, in the short run, positive and negative liquidity shocks do not have a significant effect on production, but short-term positive liquidity shocks after a break have a positive effect on GDP. Accordingly, the asymmetric effects of positive and negative monetary policies on economic growth are accepted.
s
Zahra Sharif; Masoud Nonejad; Ali Haghighat; Mehrzad Ebrahimi
Abstract
The fundamental question of this study is whether the variables that generally lead to increase in the general price level of goods and services in an economy over a period of time can reduce the prices level with the same intensity and during the same time period? To answer this question, according ...
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The fundamental question of this study is whether the variables that generally lead to increase in the general price level of goods and services in an economy over a period of time can reduce the prices level with the same intensity and during the same time period? To answer this question, according to the stylized facts and evidence of Iran’s economy, the results of the most important studies available, and the accurate official statistics, we investigate the main economic factors affecting the inflation in Iran. In this regard, using monthly time series data of economic factors (which include the liquidity, GDP, Iran's crude oil prices, and openness) over the period from November 2008 to October 2018, an error correction model based on hidden cointegration approach, CECM (Crouching Error Correction Model), has been used to differentiate between the asymmetric behaviour of variables through decomposing the variables into positive and negative components to distinguish the accurate relationships between the variables when they increase and decrease. The results of this study, while confirming the existence of the significant asymmetric relationships between the economic factors and inflation, emphasised on the incomplete pass-through of all of the factors mentioned above into the inflation rate. Furthermore, these results have confirmed the crucial role of the liquidity and real GDP in comparison to the other research variables to control the inflation rate. The results also highlighted that the period of returning the inflation rate to its long-run equilibrium would be significantly different if the policy of increase or decrease in each of the economic factors occurs; consequently, this issue should be taken into account in inflation-targeting policies.
Monetary policy
Reza Shakeri Bostanabad; Zahra Jalili; Mohsen Salehi Komrudi
Abstract
The importance of monetary policy as one of the most important demand-side policies has led to a discussion of the growth of the volume of money and its impact on various economic sectors, which has always been one of the most challenging topics in macroeconomic literature. While Monetary Policy is usually ...
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The importance of monetary policy as one of the most important demand-side policies has led to a discussion of the growth of the volume of money and its impact on various economic sectors, which has always been one of the most challenging topics in macroeconomic literature. While Monetary Policy is usually performed at a national level, its impact may depend on the properties of regions. Therefore, this research tries to answer the question: Is the Impact of Monetary Policy on the Employment of the Provinces (Iran's Industrial Provinces) is homogenous? For this purpose, using the SFAVAR method the relation between money supply and the Employment of ten Iranian Industrial Provinces in the period 2005:1-2016:4 is studied. The provinces studied were selected based on the share of value added of the industry sector of each province to the total value added of the country's industry. The results reveal the impact of monetary policy on regional employment is small and is limited to short-run. Furthermore, the response of employment to liquidity shock in various provinces is different. Overall, the results show monetary policy cannot be an effective policy to create regional employment; because its effect is slight and short-lived. Therefore, to maintain the stability of the regional economy and to prevent inflation in the provinces of the country, liquidity must be controlled.
