Volume 19, Issue 1 (3-2024)
J. Mon. Ec. 2024, 19(1): 43-71 |
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Orooji Z, Dargahi H, Hadian M. Optimal Monetary Policy in a Small and Open Oil Economy Under Households and Firms Heterogeneity in Money Demand. J. Mon. Ec. 2024; 19 (1) : 3
URL: http://jme.mbri.ac.ir/article-1-675-en.html
URL: http://jme.mbri.ac.ir/article-1-675-en.html
1- shahid beheshti university
2- Associate Prof of Economics
3- The Monetary and Banking Research Institute, Tehran, Iran
2- Associate Prof of Economics
3- The Monetary and Banking Research Institute, Tehran, Iran
Abstract: (72 Views)
This study evaluates the optimal monetary policy under different shocks into a small and open oil economy DSGE model by assuming heterogeneity of households and firms in money demand. The results show that the heterogeneity of economic agents affects the transmission mechanisms of monetary policy in the economy due to differences in households' asset portfolios and firms' liquidity constraints. The loss of the central bank for the entire simulation period in the heterogeneous model for shocks is less compared to the homogeneous model. In addition, the results regarding the selection of monetary policy rules indicate that the use of monetary base growth tool in oil shocks and the use of interest rate policy tool in nominal money demand shocks minimizes central bank losses.
Article number: 3
Type of Study: Original Research - Theoric |
Subject:
Monetary Economics
Received: 2 Feb 2025 | Accepted: 25 May 2025 | Published: 29 Jun 2025
Received: 2 Feb 2025 | Accepted: 25 May 2025 | Published: 29 Jun 2025
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