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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:   (2909 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]   (1524 Downloads)    
Type of Study: Original Research - Theoric | Subject: Economics
Received: 25 Jun 2016 | Accepted: 25 Jun 2016 | Published: 25 Jun 2016
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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

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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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