Volume 21, Issue 3 (9-2026)
J. Mon. Ec. 2026, 21(3): 447-510 |
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mohammadi Z, Bakhshi R, Vaez barzani M. Restructuring Non-Performing Loans and Liquidity Distribution. J. Mon. Ec. 2026; 21 (3) : 5
URL: http://jme.mbri.ac.ir/article-1-759-en.html
URL: http://jme.mbri.ac.ir/article-1-759-en.html
1- Faculty of Economics, Isfahan University, Isfahan, Iran
Abstract: (67364 Views)
The distribution of bank deposits is an increasingly important factor in financial and economic stability. Given recent developments in monetary policy and challenges arising from the repayment of non-performing loans, this issue has gained even greater significance. This study examines the repayment of non-performing loans on the distribution of deposits in the Iranian economy using a New Keynesian Stochastic Dynamic General Equilibrium (DSGE) model. The findings indicate that a technological shock reduces macroeconomic production and income of firms. In this regard, the repayment of firm debt to banks decreases, and banks offer implicit extensions, resulting in an increase in bank debt and endogenous liquidity creation. This process disrupts the distribution of liquidity between household bank deposits and leads to an imbalanced distribution of liquidity in various sector of the economy. This research, by presenting a DSGE model focused on banks and taking into account the mechanisms of non-performing loan repayment, provides a more detailed analysis of theses effects. The results indicate that the concentration of liquidity in the hands of households, due to a negative shock, can lead to increased financial risk and a reduction in investment in the productive sectors.
Article number: 5
Keywords: Liquidity Distribution, Endogenous Liquidity Creation, Dynamic Stochastic General Equilibrium (DSGE) Model
Type of Study: Original Research - Theoric |
Subject:
Macroeconomics
Received: 18 Jan 2026 | Accepted: 1 Jun 2026 | Published: 8 Aug 2026
Received: 18 Jan 2026 | Accepted: 1 Jun 2026 | Published: 8 Aug 2026
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