The impact of monetary policy through the banking facility channel on macro variables in Iran's economy with the DSGE model approach

Haghtalab, Mansour; Mehrara, Mohsen; Barkhordari, Sajad

doi:10.22075/jem.2022.27917.1754

The impact of monetary policy through the banking facility channel on macro variables in Iran's economy with the DSGE model approach

Document Type : Original Article

Authors

Mansour Haghtalab ¹

Mohsen Mehrara ²

sajad barkhordari ³

¹ Ph.D student of Economics, Financial Economics, Aras International Campus, University of Tehran

² Professor of Economics, Faculty of Economics, University of Tehran

³ Associate Professor of Economics, Faculty and Economics, University of Tehran

10.22075/jem.2022.27917.1754

Abstract

The purpose of this study is to investigate the impact of monetary policy through the channel of bank facilities on macro variables in Iran's economy. In order to analyze the results, dynamic stochastic general equilibrium (DSGE) was used in terms of the structure of the banking system in the period of 1370-1399 based on the frequency of seasonal data. In the statistical analysis section, the impact of monetary policy on banking and macroeconomic variables was compared and evaluated. Based on the obtained results, it can be stated that most of the macroeconomic variables have shown the most positive reaction to the shock caused by the banking facilities as a channel for influencing the monetary policy. Based on this, the independence of the Central Bank and not imposing the results of the government's budget policies on the monetary policies of the Central Bank is a solution to make the monetary policies efficient in the medium and long term.

Keywords

Monetary policy

Monetary policy channel

Bank facilities

Balance sheet

Dynamic Stochastic General Equilibrium (DSGE)