RT - Journal Article T1 - Evaluating the Impacts of Balance of Payments Variables Shock on Selected Macroeconomic Variables Using FAVAR JF - JSE YR - 2019 JO - JSE VO - 10 IS - 37 UR - http://jemr.khu.ac.ir/article-1-1882-en.html SP - 69 EP - 103 K1 - Balance Payments K1 - Current Account K1 - Capital Account K1 - Exchange Rate K1 - Factor Augmented Vector Auto-Regressive Model (FAVAR) AB - International balance of payments is one of the most common criteria for measuring the flow of trade and capital transfers in an open economy. The three main components of this balance are: trade balance, current account (or difference between export and import of goods and services) and capital account. In this study, factor augmented vector autoregressive model (FAVAR) was used to evaluate the effects of balance of payments shocks on macroeconomic variables in the Iran economy in periode 1989-2017. The factors used in this study included economic growth, oil revenues, money growth, inflation, exchange rates and interest rates. The results show that the shock from the current account and capital account led to an increase in production, consumption and investment. The reaction of nominal sector variables such as inflation and interest rate to positive shock was also positive. Comparison of the results of this study shows that incorporation of hidden variables and factors into the model resulted in faster response of macroeconomic variables to the shocks entered by the balance of payments components. LA eng UL http://jemr.khu.ac.ir/article-1-1882-en.html M3 10.29252/jemr.10.37.69 ER -