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J. Mon. Ec. 2013, 8(4): 19-58 Back to browse issues page
A Model of Financial Shocks at Bank and Interbank of Iran (DSGE)
Abbas Shakeri , Azam Ahmadian
Abstract:   (1847 Views)

This paper proposes a fully micro-founded framework that incorporates optimizing banks into a DSGE model, and evaluates the role of banks and financial shocks in the Iranian business cycles. We consider banks that offer different banking services and interact in an interbank market. Loans are produced using interbank borrowing and deposits. Banks have monopoly power, but cannot set nominal deposit and prime lending rates. The model also includes financial and unconventional monetary policy shocks. The main findings are: (1) Capturing the key features of the economy of Iran; (2) bank behavior substantially affects credit supply conditions and the transmission of different shocks; (3) financial shocks have significant effects on the Iranian business cycle fluctuations.

Keywords: Banks, Interbank market, Financial shocks, Monetary policy
Full-Text [PDF 1143 kb]   (870 Downloads)    
Type of Study: Research | Subject: Economics
Received: 2016/06/25 | Accepted: 2016/06/25 | Published: 2016/06/25
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Shakeri A, Ahmadian A. A Model of Financial Shocks at Bank and Interbank of Iran (DSGE). J. Mon. Ec.. 2013; 8 (4) :19-58
URL: http://jme.mbri.ac.ir/article-1-167-en.html


Volume 8, Issue 4 (fall 2013) Back to browse issues page
Journal of Money and Economy Journal of Money And Economy
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