The aim of this study is to examine the distributional effects of monetary policies in the Iranian economy using a New Keynesian dynamic stochastic general equilibrium (DSGE) model. The model includes two heterogeneous household groups: households with financial assets (NLC), whose wealth is a composite of cash balances, deposits, gold, foreign currency, and housing, and households without financial assets (LC), who rely on wages and transfer payments. The effect of a conventional monetary policy shock, based on the McCallum rule and monetary base growth, was examined using quarterly data from 1370 to 1402 (Solar Hijri), and the parameters were estimated using the Bayesian method and the slice sampler. The results showed that an expansionary shock, through the asset price channel, increases the asset value of NLC households, but LC households, because of lack of access to financial markets, are affected only with a delay and through the wage channel. Consequently, income distribution between the two groups worsens. Expansionary monetary policies without complementary distributional instruments intensify inequality and reduce the purchasing power of low-income groups.
Keywords: Monetary policy, distributional effects, heterogeneous household, financial asset, dynamic stochastic general equilibrium model.