[Home ] [Archive]   [ فارسی ]  
Main Menu
Home
Journal Information
Aims& Scopes
Editorial Board
About the Journal
Journal News
Articles archive
All Issues
Current Issue
Browse by Authors
Browse by Keywords
For Authors
Call for Papers
Submission Instruction
Submission Form
For Reviewers
Reviewers Section
Registration
Registration Information
Registration Form
Contact us
Contact Information
Contact us
Site Facilities
Site map
Search contents
FAQ
Top 10 contents
Inform to friends
::
MBRI Journals

Journal of Money & Economy

AWT IMAGE

(رتبه علمی-پژوهشی)

..
Related Journals

Journal of Islamic Finance Research

AWT IMAGE

(Biannual)

..
Search in website

Advanced Search
..
Receive site information
Enter your Email in the following box to receive the site news and information.
..
:: year 9, Issue 28 (Summer 2016) ::
JMBR 2016, 9(28): 251-276 Back to browse issues page
Expectations Trap of Discretionary Monetary Policies: Fiscal Domination in Iran
Ali Hussein Samadi , Hussein Marzban , Sakine Owjimehr *1
Abstract:   (2842 Views)

Discretionary policies, lead to the expectations traps and multiple equilibria in economy, which could be the most important causes of persistent inflation. This study by using a micro foundation general equilibrium investigates expectations traps of discretionary monetary policy in dominant fiscal policy condition. Our calibrated model shows that the interest rate in these conditions is about 2.5 times greater than the rate of interest achieved by the assumption of independent monetary policy. This result shows the amount of effect of taking advantage of discretionary monetary policy, with the aim of achieving government budget, on increasing the equilibrium interest rate. This increase consequently raises the equilibrium inflation rate and results in persistent inflation traps in the economy. The model was also calibrated using data from Iran. The results show that equilibrium of Iran's economy will be achieved at the interest rate of 12%. In other words, in the interest rate of less than 12%, the benefit of inflation is more than the cost of inflation distortion.

Full-Text [PDF 742 kb]   (2233 Downloads)    
Type of Study: Empirical Study | Subject: Monetary Policy, Central Banking, and the Supply of Money and Credit (E5)
Received: 2016/03/12 | Accepted: 2017/01/4 | Published: 2017/05/22
Send email to the article author


XML   Persian Abstract   Print



Rights and permissions
Creative Commons License This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
year 9, Issue 28 (Summer 2016) Back to browse issues page
فصلنامه پژوهش‌های پولی-بانکی Journal of Monetary & Banking Research
Persian site map - English site map - Created in 0.06 seconds with 37 queries by YEKTAWEB 4712