International Journal of Nonlinear Analysis and Applications

Investigating the positive and negative impulses of financial policy on the economy; DSGE model (Case study: Iranian economy)

Document Type : Research Paper

Authors

1 Department of Economics, Science and Research Branch, Islamic Azad University Tehran, Iran

2 Department of Economics, Allameh Tabataba'i University, Tehran, Iran

Abstract

Financial policies, which are applied with the means of government spending and tax revenues, are among the government's effective levers on macroeconomic variables, which are carried out in order to stabilize economic fluctuations or accelerate economic growth. And for the effectiveness of financial policies, through the application of positive and negative impulses in government spending, to investigate the asymmetric effects of these policies on the variables of total production, private sector production, public sector production, private sector consumption and sector investment. private, using dynamic stochastic general equilibrium models, during the time period of the first quarter of 2019 to the fourth quarter of 2013. The general purpose of this research is to design a stochastic dynamic general equilibrium model for the Iranian economy in order to investigate the effects of fiscal policy impulses on the real production of the Iranian economy. ?" It seems that the effects of positive and negative financial policy impulses on economic growth are significant. The technique used in this research is the Dynamic Stochastic General Equilibrium (DSGE) model, and in order to analyze the data, the dynare program was used in Matlab and Eviews software. The result of the research shows that the positive and negative impulses of government spending have significant but asymmetric effects on macroeconomic variables. Also, the negative impulse effect of government spending (contractionary fiscal policy) is decreasing and greater than the increasing effect of a positive impulse of government expenditures (expansionary fiscal policy).

Keywords

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International Journal of Nonlinear Analysis and Applications
Volume 14, Issue 8
August 2023
Pages 107-118
  • Receive Date: 15 September 2022
  • Revise Date: 18 November 2022
  • Accept Date: 30 November 2022