Volume 19, Issue 4 (12-2024)
J. Mon. Ec. 2024, 19(4): 539-564 |
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Izadi H R. Is the Friedman rule established in the Iran's economy?. J. Mon. Ec. 2024; 19 (4) : 5
URL: http://jme.mbri.ac.ir/article-1-689-en.html
URL: http://jme.mbri.ac.ir/article-1-689-en.html
Associate Professor of Department of Economics Faculty of Management and Humanities Chabahar Maritime University, Iran
Abstract: (743 Views)
This study examines whether the Friedman rule can be considered an optimal monetary policy for Iran’s economy, considering various tax instruments. Using a dynamic stochastic general equilibrium (DSGE) model, this research analyzes different taxation scenarios—including consumption tax, capital income tax, and labor income tax—to assess the applicability of the Friedman rule. The findings indicate that under different scenarios, zero inflation and price stability emerge as optimal policies for Iran’s economy. Furthermore, given governments’ efforts to minimize distortions caused by taxes across various economic sectors, negative taxation (subsidies) is confirmed under Ramsey's optimal conditions. This study expands previous research by integrating comprehensive taxation frameworks within a DSGE model, offering deeper insights into monetary and fiscal interactions and providing practical recommendations for policymakers aiming for macroeconomic stability.
Article number: 5
Type of Study: Original Research - Empirical |
Subject:
Monetary Economics
Received: 14 Apr 2025 | Accepted: 20 Jul 2025 | Published: 6 Aug 2025
Received: 14 Apr 2025 | Accepted: 20 Jul 2025 | Published: 6 Aug 2025
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