New Keynesians
Sohrab Delangizan; Ali Falahati
Volume 1, Issue 3 , January 2012, , Pages 163-136
Abstract
One of the most important macroeconomic discussions is the effects of monetary policies on the real section of economy. With this respect, the present article investigates the asymmetric or symmetric effects of monetary shocks on the economic growth of Iran. In this article, the relevant model extracted ...
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One of the most important macroeconomic discussions is the effects of monetary policies on the real section of economy. With this respect, the present article investigates the asymmetric or symmetric effects of monetary shocks on the economic growth of Iran. In this article, the relevant model extracted from macroeconomic literature of money in Iran's economy is being examined. The results demonstrate that money isn’t neutral in Iran's economy and the effects of monetary policies on growth of Iran's economy are asymmetric. The negative monetary shocks influence the economic growth more than the positive monetary shocks; so that the negative monetary shocks in boom cycles and the positive monetary shocks in recession cycles have more significant effect on the economic growth. According to the result, it can be demonstrated that the effects of monetary shocks on economic growth is larger and more asymmetric if the shocks are bigger, and the lower the monetary shocks, the less the effects, consequently the asymmetry of negative and positive shocks will be slight. Also there are information gaps between economic makers so that the expectations are not formed rationally in Iran. So according to the results, it can be concluded that Iran's economy is in agreement with the Keynesian economics.
