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According to Taylor (1993) rule, the monetary authority responds to deviations of output and of inflation from their targets through nominal interest rate fluctuations regarded as policy instrument. Another specification that has received considerable attention is that policymakers may have asymmetric preferences with regard to their objectives during recessions and expansions. Since according to Law for Usury (Interest) Free Banking of Iran, the objective of the central bank is not the control of interest rate, instead it is money growth rate which is used as an instrument, in this study we introduce a money growth rate reaction function and we use it to test the asymmetry in central bank behavior during recessions and expansions. The estimation results of a Markov Switching model for the period 1367:1 to 1387:2 show that the central bank sensitivity toward output is more during the recessions while its sensitivity toward inflation is more during the expansions.

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Price shocks lead to oil price volatility in world oil markets. In response to this volatility, economic growth may take different regime and behavior patterns in different situation. Investigating this multi behavior patterns can be useful for policymakers to reduce the effect of oil price volatility. In this study, an EGARCH model has developed using the seasonal data of OPEC oil basket nominal prices during 1367:Q1-1389:Q4. Markov switching models is also applied to investigate the multi behavior patterns of economic growth in response to oil price volatility in Iran. The results show that positive oil price shocks sharply lead to formation of oil price volatility, but, the negative price shocks will slightly reduce oil price volatility. Iranian economic growth is affected by this volatility under three different behavior regimes. If the economy switch to one of the regimes (low, medium, high economic growth), the probability of transition between these regimes and their duration is different. So, oil price volatility as a reason for low economic growth in Iran may cause the economy switch to its lower situation.

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ABSTRACT Considering the major impact which changes in the real exchange rate and crude oil prices have on various sectors of Iran's economy and the importance of the financial markets role in economic growth and development, this paper aimed to investigate the effects of the changes in real exchange rate and crude oil prices on Tehran stock exchange using the Markov-Switching's nonlinear models. To this end, daily data which belonged to the following periods were used: 20:03: 2005 - 13:10:2010 The result of the estimations obtained through the Markov Switching Models indicated that MSIAH model with two regimes out of the various MS model are the most suitable ones. The result of the research showed that the changes in the exogenous variable of real exchange rate and the crude oil price have lagging positive effect on the Stock Exchange Index. Moreover, the effects of these changes with two lagging time intervals are significant and negative. The practical implications of these findings could be beneficial to the investors and policy makers who need to be aware of the exact nature of the effects which changes in the exchange rate and crude oil prices have on the stock exchange index.

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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.