Volume 16, Issue 4 (Fall 2021)                   J. Mon. Ec. 2021, 16(4): 477-500 | Back to browse issues page

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Soltani S, Falihi N, Mehrabiyan A, Amiri H. Investigating the Effects of Monetary and Financial Shocks on the Key Macroeconomic Variables, Focusing on the Intermediary Role of Banks Using DSGE Models. J. Mon. Ec. 2021; 16 (4) :477-500
URL: http://jme.mbri.ac.ir/article-1-541-en.html
1- Ph.D. in Economics, Islamic Azad University of Centeral Tehran Branch
2- Faculty of Economics, Islamic Azad University of Centeral Tehran Branch
3- Faculty of Economics, Kharazmi University
Abstract:   (882 Views)
This study investigates monetary and financial shocks on macroeconomic variables, focusing on the role of banking intervention. For this purpose, a Keynesian dynamic stochastic general equilibrium (DSGE) model is designed for Iran’s economy that involves financial and banking sectors. The results of the model simulation show that the financial accelerator theory works in the Iranian economy. Also, the intermediary role is confirmed by the impulse response function. In other words, economic policies can impress on macroeconomic indicators more when banks intervene in the economy. Therefore, to control the effects of economic shocks on banks' performance, it has been suggested that monetary policymakers pay attention to the important roles of financial markets in the transfer mechanism and monetary policy intensity. On the other hand, because of mandatory rules of interest rates determination, banks have to establish a commission and nonprofit services instead of sharing income to decrease the effect of economic shocks.
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Type of Study: Original Research - Empirical | Subject: Monetary Economics
Received: 1 May 2021 | Accepted: 26 Feb 2022 | Published: 2 Mar 2022

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