Showing 13 results for Money
Amir Reza Soori, Dr Ahmad Tashkini, Mohammad Reza Saadat,
Volume 1, Issue 2 (12-2010)
Abstract
The main purpose of this paper is to examine the effect of merger, concentration and credit risk on the efficiency of Iranian Banking industry. To measure the efficiency of Iranian banking system, we have used the data of commercial & specialized bank's balance sheets during 2001-2007, and a parametric approach to estimate two empirical models.
To estimate efficiency measures and determining main factors affecting the measures, we have used a Logarithmic - Linear form of a random Translog cost function. The results of the first estimated efficiency model show that the average efficiency measure of banking system in Iran is 54% and that the merger of the more inefficient banks within the efficient bank will cause the average efficiency measure rise to 70%
The results of the second model - assessing the effecting factors on efficiency- show that the efficiency of banks has an inverse relationship with the concentration (competition in banking industry), and a direct relationship with the IT index (e-banking activity) and the facilities to assets and capital to assets ratios (as the indices of the credit risk).
Amir Jabari, Dr Mohsen Renani, Dr Nematollah Akbari,
Volume 2, Issue 3 (3-2011)
Abstract
The unequal allocation of economic resources, or other resources of wealth, regarding to the efficiency among the factors of production, is considered as one of the most important condition of optimal resource allocation in the market system. In other words, the market mechanism in the process of allocating resources among the factors of production rewards to the resources with higher returns. So, the article’s main question is whether the unequal distribution of votes similar to the unequal distribution of money, can be applied in the process of the optimal allocation of citizens' benefits in the democracy system?
The answer of this question has been given by the monetary model which is similar to the democracy, using the concept of Anthony Downs’s (1957) rational voter hypothesis, the idea of Paul Samuelson's (1958) monetary economic model, the microeconomic theory of consumption and just one of the major components of the market –the unequal distribution of money–. Using the designed model, we can survey several statuses, Such as: vote exchange possibility (similar to the barter economy) and weighting of votes.
The article’s results show that the social contract possibility for exchange and the ability to save money causes to change of the shape and nature of the money from public goods to private goods and the interest rate creation. In this situation, one of the important findings of Samuelson model of monetary is appeared in the space of voting theory. One of the contributions of the monetary model of Samuelson is that one of the origins of the monetary interest rate is population growth. The other results show that the weighting of buyers in the monetary model design under conditions can be led to more efficient choices and social welfare increase ultimately.
KEYWORDS: Democracy, Market, Political Market, Money, the Weighting of Votes, Downs’s Rational Voter Hypothesis, Samuelson's Monetary Economic Model.
- Mohammad Mehdi Mojahedi Moakhar, Dr Rahim Dallali Esfahani, Dr Saeid Samadi, Dr Rasoul Bakhshi Dastjerdi,
Volume 2, Issue 5 (10-2011)
Abstract
The purpose of this paper is to investigate the source of fractional reserve banking and to review the literature on bank credit. Evaluating the operational procedure of this banking model demonstrates a new concept of credit money shaping aspect and its affect on the practical economy. The difference in due dates between depositing and receiving loan that causes Ex-nihio money to exist, the effect of this money on prices along with economic instability are among the issues that have occupied the critic scholar's minds in fractional reserve banking realm. In this paper, the effects of the fractional reserve banking model on the consumption behavior are analyzed. Also, the view points of the critics of this banking model are addressed. In this regard, an inter-generational consumption behavior model based on Maurice Allais's perspectives has developed. Results show that optimizing the existing model is the true test of the consumption instability in a permanent state in the fractional reserve banking realm. Also, according to the results there exits the possibility of instable capital repletion under certain circumstances.
Dr Alireza Erfani, Khayam Sadeghi, Mohammad Mahdi Poya,
Volume 4, Issue 13 (10-2013)
Abstract
Simple sum monetary aggregation approach that based upon perfect substitution of monetary components assumption is inconsistent with microeconomics theories. In this research, using quarterly data of Iran over period 1370:1–1388:1, we first calculate monetary aggregation based on divisia index for both measures of money (M1, M2) and then estimate the demand functions for money for divisia and simple sum monetary aggregations separately.
The results show that the adjustment speed of divisia aggregations is more than that of simple sum aggregations and the demand functions for money that construct by divisia aggregations, are more stable.
Hojjat Izadkhasti, Said Samadi, Rahim Dallali,
Volume 5, Issue 15 (3-2014)
Abstract
Money is a facilitator of economic activities, thus, formatting of economic activity is dependent on the institutionalizing of monetary system. In common monetary system, the weakness of common perception about money, publishing and distributing mechanism led to inefficiencies in optimal allocation of resources and welfare cost of inflation tax. Partial equilibrium model in compare with general equilibrium model, underestimate welfare cost of inflation tax. Therefore, in dynamic optimization model, the equation of welfare cost of inflation tax, in addition to general equilibrium model of Lucas, derived from theoretical correction of demands for real money balances. Then welfare cost compared theoretically and experimentally in partial and general equilibrium model. Theoretical and experimental results indicate that the welfare costs of inflation tax in general equilibrium models, is an upper bound of partial equilibrium models. Also, given that the elasticity of demand for money in regard to the nominal interest rate, the welfare cost of inflation tax increases with nominal interest rate and inflation.
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Volume 5, Issue 15 (3-2014)
Abstract
IN ACCORDANCE TO DEVELOPMENT OF INFORMATION AND COMMUNICATION TECHNOLOGY IN IRAN, ELECTRONIC BANKING HAS BEEN DEVELOPED IN RECENT DECADE.A MEANINGFUL TRANSFORMATION HAS BEEN PLACED IN THE STYLE OF EXISTING BANKING SYSTEM SERVICES, BY SIGNIFICANT INCREASE IN THE USE OF ELECTRONIC BANKING TOOLS IN TEN YEARS.
THE REFLECTION OF THIS PHENOMEN IS CLEAR IN THE BEHAVIOR OF PEOPLE AND BANKING SYSTEM WHO CARE ABOUT CASH, MONEY DEMAND PREFRENCES AND VARIATION IN THE COMPOSITION OF BANK RESOURCES.THEREFORE EFFECTIVENESS OF E-BANKING ON VARIABLES SUCH AS MONEY DEMAND IS A TOPIC WHICH APPEARS ESSENTIAL TO STUDY.
DEMAND MONEY FUNCTION IS ONE OF THE MAIN IMPORTANT PARTS OF MONETARY SYSTEM AND PLAY CRUCIAL ROLE IN TRANSMISSION OF MONETARY POLICY TO THE REAL ECONOMIC SECTION. THE IMPACT OF THIS ON OTHER COMPONENT OF ECONOMIC SYSTEM, BOTH MONETARY AND NON-MONETARY IS INEVITABLE.
IN OTHER WORDS, TO ANALYZE MONETARY ISSUES AND SOLVING THE PROBLEMS, IT IS NECESSARY TO UNDERSTAND THE NATURE OF MONEY DEMAND. IN THIS PAPER, THE DEMAND FUNCTION HAS BEEN ESTIMATED BY USING AR METHOD AND ENTERING EXOGENOUS VARIABLES IN MARKOV SWITCHING VECTOR AUTO REGRESSION MODEL.
FOR MODELING OF MONEY DEMAND FUNCTION, SEASONAL DATA BETWEEN 2002 TO 2011 HAVE BEEN USED. ALSO THE EFFECT OF TRANSACTION VOLUME THROUGH POINT OF SALE(POS) AND AUTOMATIC TELLER MACHINE (ATM) AS EN-BANKING INDEX HAS BEEN DETERMINED.
ACCORDING TO STABILITY TESTS, ESTIMATING THE MONEY DEMAND WICHE CONTAIN EN-BANKING VARIABLES IS UNSTABLE.
THERFOR, IT CAN BE STATED THAT THE RESULTS OF FISCAL AND MONETARY POLICIES OF THE CENTRAL BANK AND THE GOVERNMENT TO ACHIEVE ITS GOALS DUE TO UNCERTAIN DEMAND MONEY POSITION, SOMETIMES IS REVERSED.
Mostafa Karimzadeh,
Volume 5, Issue 15 (3-2014)
Abstract
The specification of money demand function is one of the most
important and disputable subjects in economics. With regard to its importance, many of economists have represented several theorizes about money demand.
The Sidrauski monetary model is an interesting theory of money demand.
Sidrauski extended Ramsey model with regard real balance of money which in the
Sidrauski model the utility function involves both consumption and money. Application
of Sidrauski model can help to extend
macroeconomics with micro foundations in Iran and prepares new scopes for
researchers. The main aim of this paper is to estimate the Sidrauski monetary model for Iranian economy over the period
of 1979 -2011. For this purpose, the Engle – Granger, ARDL and Johansen-
Juselius approaches have been used for estimation of long run relationship of
money demand. The empirical results of econometric estimation of co-integration
vector indicated a long run relationship between per capita money demand, per
capita consumption, and inflation rate, rate of interest, exchange rate, per
capita income, and stock exchange price index. Our
results showed that per capita consumption and per capita income have positive
and significant effect on per capita money demand. Whereas inflation rate, rate
of interest, exchange rate and stock exchange price index
have negative and significant effect on per capita money demand.
Ali Taiebnia, Hamed Farnam,
Volume 6, Issue 19 (3-2015)
Abstract
This paper seeks to investigate and analyze the money demand function and its Engle curve in Iran. Money demand function and its Engle curve have been estimated through EASI demand system by making use of monthly data 1995:04-2007:03. The investigation of money demand function shows that monetary elements are weak substitutions of each other. Thus, some policy recommendation is provided on the basis of estimated elasticity (Income, Price, cross Price, and Morishima). Moreover, the investigation of Engle curve reflects that by the increase of income, first, individuals extract their money from demand deposit. Secondly, investment in timed deposits increases and thirdly, no change is observed in the amount of money being held as currency and travel checks.
Hamed Abdolmaleki, Hossein Asgharpur, Jafar Hghighat,
Volume 8, Issue 28 (7-2017)
Abstract
Money supply and velocity of money are important variables that affect inflation and product. Velocity of money is a key concept for economic policy, and it's getting more important since it is closely related to behavior of the demand for money. In this regard, Friedman believes that the volatility of money growth is the main factor of velocity of money, which in monetary economics literature is known as Friedman’s monetary volatility hypothesis. The purpose of this study is to explore and explain the fluctuations in the velocity of mony from the perspective of Monetarism. In this regard, using Iran’s economic quarterly data for the period 1988(3)-2015(1) and in the framework of causality test, the Friedman hypothesis based on the impact of volatility of money growth on velocity of money is tested for monetary aggregates (M1 and M2). The model used in this paper is extended VARMA, GARCH-M and the estimated method is quasi maximum likelihood (QML). The results support the Friedman hypothesis for the period under study; in other words, there is a causal relationship from money growth volatility to velocity of money.
Manizheh Bratzadeh, Javad Harati, Mohammad Lashkari,
Volume 9, Issue 33 (10-2018)
Abstract
Money laundering is an illegal practice that legitimizes the income from illegal activities during a legitimate process.Trade-based money laundering (TBML) as one of the newest and most complicated types of money laundering has negative effects on economic, social and political aspect of a society.The most important objective of the present study is to investigate the effect of various factors on trade based money laundering in Iran using the Ferwerda Gravity model.For this purpose the effective factors on trade base money laundering between iran and some selected trade partners are investigated by the use of a random effect model during the period 1999-2012. The results indicate that a great significant part of the trade based money laundering flow between Iran and selected trade partners can be explained by the the Ferwerda Gravity model. Accordingly, gorss doimestic product(GDP), trade volume, geographical, cultural, population and attractiveness variables have a significant effect on the amount of trade based money laundering in Iran.This means that with the increase in trade flow, money laundering opportunities resulted from the trade channel, that is hidden in it, will also increase. These results can be used by policy makers for designing policies to combat money laundering particularly coming from trade channel.
Reza Roshan,
Volume 10, Issue 36 (6-2019)
Abstract
In this paper, we try to develop and modify the basic model of the consumption-based capital asset pricing model by adding the growth in real money balances rate as a risk factor in the household's utility function as (M-CCAPM). For this purpose, two forms of utility function with constant relative risk aversion (CRRA) preferences and recursive preferences have been used such that M1 and M2 are considered as inputs in the utility function. After estimating the systems of Euler equations using generalized moments method, MSE, MAE, and HJ criteria were used to select the most suitable model for estimating the share of variable of real money balance. The above criteria show that the model with the input of liquidity (M2) and preferences with constant relative risk aversion is the most appropriate model. The results indicate that the share of real money balance in the utility function of Iranian households is statistically significant and is about 34%. Therefore, considering the contribution of the monetary variable to the utility function which is relatively significant, it is emphasized on its entry into the utility functions used in asset pricing models.
Majid Maddah, Mahla Sinaeyan,
Volume 11, Issue 40 (6-2020)
Abstract
Money Laundering (ML) reduces the confidence of investors to the financial market, worsen political instability and deviates resources allocation to unproductive sectors by weakening of financial institutions credit. In the ML, illegal resources are entered into the legal economy secretly and outside formal control whereby it has hidden nature. The aim of this paper is to study the different sizes ML and its changes in Iranian economy in the context of latent variables literature using Partial Least Squares Structural Equation Modeling (PLS-SEM) over the period 1360 to 1396. According to the results from paper firstly, drug trafficking and theft crimes have a positive and significant effect on ML trend. Besides that, economic conditions influence an individual’s motivation to enter illegal activities. Secondly, ML growth is associated with decreasing economic growth and increasing the volume of cash that waste economic stability. Thirdly, ML has an upward trend which based on it can be anticipated that in spite of crimes growth, especially drug trafficking, the increasing trend of ML will continue.
Davoud Mahmoudinia, Hadis Mazangi,
Volume 12, Issue 46 (12-2021)
Abstract
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.
