In collaboration with Payame Noor University and Iranian Association for Energy Economics (IRAEE)

Document Type : Quarterly Journal


1 Assistant Professor of Economics, Mofid University, Qom, Iran

2 M.A. in Economics, Islamic Azad University, Tehran, Iran

3 Assistant Professor of Economics, Islamic Azad University, Tehran, Iran


The most important objectives of monetary policy are to provide price stability, economic growth and favorable employment levels. Since achieving these goals is not directly accessible for policy makers, so introducing and studying the appropriate tools and intermediate targets seem necessary. For this reason, this paper tries to answer this question: Whether can we introduce an appropriate rule/procedure as monetary policy [or not]. Therefore, this paper applied the well-known procedure of McCallum [a rule based on the optimum monetary rate] as well studied its fitness with the economic system of Iran over 1984-2013 by the use of GMM method. The results show that the defined optimum path by McCallum procedure [for the monetary growth rate] can be accounted as the appropriate strategy for the monetary policy in Iran and the economy of Iran can use it as a proper benchmark in its policy decisions.


Main Subjects

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