Showing 9 results for General Equilibrium Model
Seyed Fakhroddin Fakhrehoseini,
Volume 2, Issue 3 (3-2011)
Abstract
A Dynamic Stochastic General Equilibrium (DSGE) Model is developed to study monetary business cycles impacts of volatilities of oil revenue and money supply on macroeconomic variables in Iran. The results show that 0.15 percent deviation from the trend of steady state inflation is explained by changes in oil revenue when it is accompanied by change in money aggregates. However, if such changes in oil revenues are not financed by the central bank, inflation deviates only by 0.1 percent.
The results reemphasize the fact that money is neutral in a non-sticky price framework and only affect output and employment by 0.05 and -0.01 percent respectively.
Dr Javid Bahrami, Parvaneh Aslani,
Volume 2, Issue 4 (6-2011)
Abstract
This study tries to examine the way housing residential investment in Iran's urban area is influenced by the shocks of oil revenues, and for that, time series data spanning the period 1991:1-2007:4 are deployed in a Dynamic Stochastic General Equilibrium (DSGE) model including households, firms producing new residential houses, and the production of other economic firms as well as oil sector. The model is based on some simplify assumptions suitable to Iran's economy characteristics as: Iran as a small economy regarding capital flows, Oil Exports and goods imports and no price stickiness in housing sector. Moreover, the allocation of resources in the economy is determined by a central planning. The Model's solution and simulation is processed through using DYNARE as a subset of MATLAB software package.
The results showed that the incidence of extreme volatility in the short behavior of housing residential investment in Iran's urban area, due to shocks of oil revenues, shocks was not Persistent and quickly disappeared. This implies that Iran's economy is suffering from Dutch Disease.
Abolfazl Janati Mashkani, Dr Morteza Sameti, Dr Rahman Khosh Akhlagh, Dr Rahim Dallali Esfahani, Dr Mostafa Emadzadeh,
Volume 2, Issue 5 (10-2011)
Abstract
One of the important targets of the economic planning is economic growth via enhancement of the labor productivity. In this regard, education expenditures play a crucial role. This study aims at investigating the effect of education expenditures on the level of human capital and economic growth through a computable general equilibrium approach. The data on economic variables and social accounting matrix belongs to the year 2001. Three scenarios on education expenditures are defined and their effect on human capital and economic growth are estimated.
The results show that education expenditures have positive effects on economic growth and human capital. A 50% increase in education expenditures in the first period causes 3.81 and 5.8 percent increase in human capital and economic growth respectively. In the second period, the same increase in education expenditures affects human capital and economic growth positively by 5.4 and 7.3 percent respectively.
Although separating the economic growth into human and physical factors in the first period shows that there is no relationship between human capital and economic growth, but in second period this separation causes a relationship between the two factors.
Alimorad Sharifi, Rahman Khoshakhlagh, Marzieh Bahaloo Horeh, Ali Sadeghi Hamedani,
Volume 5, Issue 16 (7-2014)
Abstract
Energy carrier’s subsidization has placed a significant pressure on government budget in Iran thus, energy price increase is performed in order to ameliorate this case. One of the main challenges that policymakers need to consider is the impact of energy prices increase on the labor market especially, when the national unemployment rate is high. This paper utilizes a computable general equilibrium model based on a Micro Consistent Matrix for 2006 in order to evaluate the impact of energy price increase on the Iranian labor market during 2006. The empirical results are based on two scenarios: Baseline and FOB price increase scenarios. They show that the activity level and demand for labor in “crude oil, natural gas, and coal” as well as “other services” sectors will increase in short-run while the energy carriers’ prices increase. However, in long-run, the labor increment will be lower. Furthermore, the model results indicate that in short-run, the activity level and demand for labor in the other sectors will decrease. On the other hand, the policy will result in a larger decrement in the activity level and demand for labor in these sectors in long-run.
Sahar Bashiri, Mosayeb Pahlavani, Reza Boostani,
Volume 7, Issue 23 (3-2016)
Abstract
This paper investigates the relationship between monetary policy and stock market fluctuations for Iranian economy within a DSGE model. This study models the role of monetary policy in two monetary regimes including money growth and Taylor rule with traditional factors and optimal simple rule in the new Keynesian monetary framework with nominal wage and price rigidities in the Iranian economy. Bubbles in our model emerge through a positive feedback loop mechanism supported by self-fulfilling beliefs. Results show that: first, using an optimal simple rule and determining the optimal coefficients of the Taylor rule by policy makers decrease the loss function. Second, the sentiment shock which represents the size of current bubbles relative to newly born bubbles and transfers to the real economy through endogenous credit constraint, drives the movements of stock market fluctuations and variations in real economy, leading to explain the positive contemporaneous correlation between stock prices and the real economy Third, using an optimal simple rule and determining the optimal coefficients of the Taylor rule with stock price Fluctuations by policy makers decrease the loss function and it confirms that monetary policy should respond to stock market bubbles in the economy.
Bahram Sahabi, Hossein Asgharpur, Saeed Qorbani,
Volume 8, Issue 29 (10-2017)
Abstract
In this study, using Dynamic Stochastic General Equilibrium Model (DSGE model) the hypothesis of asymmetry of monetary shocks in the Iranian business cycle during the period of 1979-2012 is tested on macroeconomic variables. The designed model broadens the analytical framework of dynamic equilibrium models with respect to the economic characteristics of an oil-exporting country. To extract business cycles, the Hodrick-Prescott filtering process has been used. The results of the research indicate that the effects of positive and negative monetary shocks during ascendancy and economic prosperity are asymmetric, so that the effect of positive shock during the recession period in the Iranian economy during the studied period was stronger than the negative shock level. On the other hand, the results show that the effect of positive shocks during the boom period in the Iranian economy on the price level changes its size in proportion to the size of the shock; however, the effect of negative shocks during the boom on the level of prices initially reduced inflation and then after a short time Inflation increases again. Therefore, it can be stated that in the economy of Iran both inflation and economic boom will increase. In the case of production and investment, this asymmetry is in a way that results in a broader expansionary policy in a recession and, in economic prosperity, the optimal political policy is contractionary.
Hojjat Izadkhasti,
Volume 9, Issue 31 (3-2018)
Abstract
The impact of monetary policy on nominal and real variables in the economy is very important and controversial issues in monetary economics. Thus, the interaction between the real and monetary sectors, are the questions that different schools of economic have different responses and assumptions in this design is neutral and super-neutral of money in the long run. Accordingly, the acceptance or rejection each of the above hypotheses, effects on the role of monetary policy in the economy. This study, has been investigated the effects of monetary policy in the framework of a dynamic general equilibrium model on inflation and welfare, based on the money in utility function in Iran's economy. Then, the model is solved by using dynamic optimization and analyzed the results in the steady state. Calibration results and sensitivity analysis in steady state indicate that by decreasing the growth rate of money supply from 22% in the base state to 12%, reduces inflation rate from 20.45% to 10.57% decrease and increases real money balances from 0.1304 to 0.1352 unit, But the ratio of capital to labor, per capita production and per capita consumption do not change in the steady state. Finally, with a decrease in the rate of monetary growth and the increase in real money balances, the welfare increases in the steady state situation.
Hadi Keshavarz,
Volume 10, Issue 35 (3-2019)
Abstract
The labor market, as one of the four markets, plays an important role in economic growth and development. So review developments in the labor market because of its close relationship with developments in other sectors is of great importance. This study tries to examine the dynamics of the labor market by adjusting for a New Keynesian dynamic stochastic general equilibrium model for the Iranian economy. After the model was solved, the obtained equations were linearized and their parameters were estimated using the economic data of Iran (2005-2017) by the Bayesian method. Comparing the model's moments with the economic momentum indicates the success of the model in real-world simulation (production, consumption, investment, unemployment, and participation rate). Impulse Response Functions Survey shows that participation rates are consistent with cyclic behavior. On the other hand, in response to shocks (monetary, oil revenues, government expenditures, and public sector employment), increased employment, but the unemployment rate has changed slightly due to the change in the participation rate and the change in the size of the active population, which represents the sustainability of the unemployment rate.
Hojjat Izadkhasti, Ali Akbar Arab Mazar, Amin Jalali,
Volume 10, Issue 37 (10-2019)
Abstract
Speculative demand in the land and housing market has a fundamental role in raising the price of land and housing and causing a diversion and invasion of the housing sector with the aim of profit. The government, by imposing a tax on rent of land and housing return, seeks to control speculation, allocate the land resources and urban housing and make money to build the urban infrastructure. In this study, optimal taxation on the return of housing capital is analyzed in the framework of a dynamic optimization model in Iran. Then, the calibration and sensitivity analysis of the macro variables was done to change the tax rate on housing capital return. Finally, using the GAMS software, the optimal path of macro variables was simulated in different scenarios during the period (2016-2040). In steady state, the results of the sensitivity analysis of macro variables indicate that by increasing the tax rate on the return of housing capital from zero to 25%, and decreasing the tax rate on the return of business capital from 25% to zero, increased the level of business capital per capita, production per capita and consumption per capita by 50.62%, 13.47% and 25.27% respectively, and decreased the level of housing capital per capita by 31.5%. Also, the results of the simulation indicate that the imposing tax on the return of housing capital at a rate of 4% compared to the current state of the economy, has led to upward the optimal path of business capital per capita, production per capita and business capital per capita and gone down housing capital in the long run during the transition period.
