Journal of Economic Modeling Research

In monetary and financial literature, financial crises include a wide range of crises. But in general, there are three important types of financial crisis, including the currency crisis. The banking crisis and the debt crisis. The aim of this study is to simultaneously analyze the occurrence of banking, debt and currency crises, known as the three crises in Iran. For this purpose, first to determine the indicators related to banking crises, currency and debt payments and using logistics and self-regression vector models during the 1980 to 2017 seasonally, we have discussed the relationship between these three crises. The results show that the three banking crises, debt and currency, affect each other. The short-term results of the VAR model showed the effect of the banking crisis and the currency crisis on the debt crisis is positive and significant, indicating an increase in the likelihood of a banking crisis and the currency will increase the debt of the government and the country. Also, the effects of banking and debt crises on the currency crisis are positive and significant. This indicates the existence of causal relationship between banking crises and debt on the currency crisis. The results of the Logit model show that the effect of inflation variables, liquidity growth and the growth of the exchange rate on the indicators of the three crises that are significant and positive in most models.

Today, the unconventional policy of negative interest rate is discussed in many Western societies and developed countries, and the implementation of this policy in the financial and banking system has brought growth and prosperity in many economies involved in the crisis. In fact, by applying a negative interest rate, the bank will be able to direct credit allocation to productive and priority sectors. On the other hand, this policy, along with the independence of the central bank and the non-interference of the government in creating liquidity and making money from it, can reduce the level of inflation. Iran is a developing country with high inflation, and the interest rate as a monetary policy will not be very effective in the economy and is determined by the monetary authorities under the government's rule. When governments face budget deficits due to sanctions and lack of revenue sources, they create money by relying on their supervision over the performance of the central bank and use it as a solution to earn money, Therefore, it fuels inflation in the society. Therefore, in this research, within the framework of the optimization model of the money demand function and the model of money in the utility function, taken from the study of Walsh (2003) and Sidrauski (1967) and its extension, we will investigate the behavior of negative interest rates on inflation and optimal money interest. The obtained results show that in the environment of money interest and inflation, with the application of negative nominal interest rate, the equilibrium path has a downward and decreasing trend, and in this situation, inflation and money interest will decrease in the long term. Therefore, the government has the ability to compensate for its budget deficit through solutions such as bonds and income tax, and in the long term, by reducing the money interest rate, it can reduce the level of inflation in the society and this will improve the social welfare of people.