Volume 21, Issue 2 (6-2026)
J. Mon. Ec. 2026, 21(2): 139-182 |
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Naraghi H, Sarlak A, Fakhohosseini S F, Sharifnezhad M. Optimal Monetary Policy Rules in Response to Oil Revenue and Liquidity Shocks: A DSGE Model for Iran. J. Mon. Ec. 2026; 21 (2) :139-182
URL: http://jme.mbri.ac.ir/article-1-744-en.html
URL: http://jme.mbri.ac.ir/article-1-744-en.html
Optimal Monetary Policy Rules in Response to Oil Revenue and Liquidity Shocks: A DSGE Model for Iran
1- Department of Economics, Ar.C.,Islamic Azad University,Arak,Iran
2- Corresponding Author,Department of Economics,Ar.C.,Islamic Azad University,Arak, Iran
3- Department of Financial Management, Karaj Branch,Ka.C., Islamic Azad University,Karaj,Iran
4- Department of Economics, Ar.C., Islamic Azad University,Arak,Iran
2- Corresponding Author,Department of Economics,Ar.C.,Islamic Azad University,Arak, Iran
3- Department of Financial Management, Karaj Branch,Ka.C., Islamic Azad University,Karaj,Iran
4- Department of Economics, Ar.C., Islamic Azad University,Arak,Iran
Abstract: (1222 Views)
This study investigates the impact of oil revenue and liquidity shocks on optimal monetary policy in the Iranian economy using a Dynamic Stochastic General Equilibrium (DSGE) model. The developed model simulates the structure of Iran’s economy, emphasizing the interactions among households, firms, the government, and the central bank, while analyzing the effects of both domestic and external shocks. Simulation results indicate that these shocks significantly affect macroeconomic variables. Furthermore, increasing the weight of inflation control in the monetary policy function reduces the negative impacts of shocks on output and stock indices, although such control exerts additional pressure on the interest rate, potentially producing diverse consequences. The findings reveal the existence of complex and multidimensional relationships between shocks and monetary policy, underscoring the necessity of precise management of these interactions for economic stability. Accordingly, policymakers should maintain macroeconomic stability while balancing inflation control and production support. Through both quantitative and qualitative analyses, this paper contributes to a deeper understanding of Iran’s economic processes and the formulation of optimal policies under exchange rate volatility conditions.
Keywords: Dynamic Stochastic General Equilibrium (DSGE) Model, Optimal Monetary Policy, Oil Revenues, Liquidity
Type of Study: Original Research - Theoric |
Subject:
Macroeconomics
Received: 15 Oct 2025 | Accepted: 22 Dec 2025 | Published: 6 Jun 2026
Received: 15 Oct 2025 | Accepted: 22 Dec 2025 | Published: 6 Jun 2026
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