Volume 17, Issue 4 (12-2022)
J. Mon. Ec. 2022, 17(4): 513-546 |
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Rashidi D, Vaez M, Bakhshi R. Analysis of the Impact of Alternative Method of Financing the Government Budget Deficit through Issuing Treasury Bills on Economic Variables: DSGE Approach. J. Mon. Ec. 2022; 17 (4) : 4
URL: http://jme.mbri.ac.ir/article-1-614-en.html
URL: http://jme.mbri.ac.ir/article-1-614-en.html
1- Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan
Abstract: (698 Views)
Financing the government's budget deficit has conventionally taken place in the economy of Iran via borrowing from the Central Bank. However, bonds are the major way to finance the budget deficit in most countries, not admitted due to Shari'ah-compliant financial regulations in the legal system of the Iranian economy. Iranian economy intellectuals have presented an alternative source of funding termed Islamic treasury bills that differ from conventional bills. The present study is set to analyze the impact of Islamic treasury bills as a procedure for covering budget deficits on selected macroeconomic variables, including inflation, investment, gross domestic product, etc. The analysis was performed by applying the Dynamic Stochastic General Equilibrium (DSGE) model for the Iranian economy as an open economy, considering the Islamic treasury bills for reducing the government's budget shortfall. The results revealed that if the DSGE model is employed, the macroeconomic variables under the study will manifest a different and occasionally negative impact in a short-term period; however, in a long-term period, the issuance of treasury bills may positively affect mentioned variables.
Article number: 4
Keywords: Islamic Treasury Bills, Budget Deficit, Macroeconomic Variables, Dynamic Stochastic General Equilibrium (DSGE) Model
Type of Study: Original Research - Case Study |
Subject:
Macroeconomics
Received: 17 Nov 2022 | Accepted: 26 Aug 2023 | Published: 18 Oct 2023
Received: 17 Nov 2022 | Accepted: 26 Aug 2023 | Published: 18 Oct 2023
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