Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy)
One of the most important macroeconomic challenges has always been creating and implementing an economic policy, and it continues to be a key element of planner's decisions. The importance of the time difference between the design process of a policy and the time of its implementation is import...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Iranian Association for Energy Economics
2022-02-01
|
| Series: | Environmental Energy and Economic Research |
| Subjects: | |
| Online Access: | https://www.eeer.ir/article_138804_6eb83d52ad7f11041b2e0e6a5e344124.pdf |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849426752480215040 |
|---|---|
| author | Marzieh Asadi Asad Abad Seyyed Abbas Najafizadeh Baytollh Akbari Moghaddam |
| author_facet | Marzieh Asadi Asad Abad Seyyed Abbas Najafizadeh Baytollh Akbari Moghaddam |
| author_sort | Marzieh Asadi Asad Abad |
| collection | DOAJ |
| description | One of the most important macroeconomic challenges has always been creating and implementing an economic policy, and it continues to be a key element of planner's decisions. The importance of the time difference between the design process of a policy and the time of its implementation is important in the decision-making process of the economic planner because if the designed policy changes for various reasons during the implementation stage, the policymaker will be forced to revise the original design. This study emphasizes the teachings of New Keynesian economics school by designing a stochastic dynamic general equilibrium model appropriate to the situation in the country, which looks at household, oil, non-oil, import, final producer, and government sectors, after performing linearization process reviews and evaluating the optimal monetary policy, plus considering the central bank's losses. By adopting the optimal discretionary and Ramsey monetary policy approaches, relying on the importance of the weight of inflation, the results show that the understudy variables (non-oil real GDP, GDP, consumption, and inflation) would experience higher volatility in the case of adopting the discretionary policy. Therefore, the Ramsey monetary policy is a better option to control inflation volatility. Nevertheless, the present study findings on the losses by the central bank indicates less loss in the case of adopting optimal Ramsey policy compared to the discretionary policy. |
| format | Article |
| id | doaj-art-fa31d53f65af4cc2bef30e2a331f95f1 |
| institution | Kabale University |
| issn | 2538-4988 2676-4997 |
| language | English |
| publishDate | 2022-02-01 |
| publisher | Iranian Association for Energy Economics |
| record_format | Article |
| series | Environmental Energy and Economic Research |
| spelling | doaj-art-fa31d53f65af4cc2bef30e2a331f95f12025-08-20T03:29:15ZengIranian Association for Energy EconomicsEnvironmental Energy and Economic Research2538-49882676-49972022-02-016111410.22097/eeer.2021.295841.1208138804Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy)Marzieh Asadi Asad Abad0Seyyed Abbas Najafizadeh1Baytollh Akbari Moghaddam2Faculty of Management, Arak Branch, Islamic Azad University, Arak, IranFaculty of Management, Arak Branch, Islamic Azad University, Arak, IranQazvin Branch, Islamic Azad University, Qazvin, IranOne of the most important macroeconomic challenges has always been creating and implementing an economic policy, and it continues to be a key element of planner's decisions. The importance of the time difference between the design process of a policy and the time of its implementation is important in the decision-making process of the economic planner because if the designed policy changes for various reasons during the implementation stage, the policymaker will be forced to revise the original design. This study emphasizes the teachings of New Keynesian economics school by designing a stochastic dynamic general equilibrium model appropriate to the situation in the country, which looks at household, oil, non-oil, import, final producer, and government sectors, after performing linearization process reviews and evaluating the optimal monetary policy, plus considering the central bank's losses. By adopting the optimal discretionary and Ramsey monetary policy approaches, relying on the importance of the weight of inflation, the results show that the understudy variables (non-oil real GDP, GDP, consumption, and inflation) would experience higher volatility in the case of adopting the discretionary policy. Therefore, the Ramsey monetary policy is a better option to control inflation volatility. Nevertheless, the present study findings on the losses by the central bank indicates less loss in the case of adopting optimal Ramsey policy compared to the discretionary policy.https://www.eeer.ir/article_138804_6eb83d52ad7f11041b2e0e6a5e344124.pdfoptimal monetary policycentral bank loss amountdynamic stochastic general equilibrium model (dsge) |
| spellingShingle | Marzieh Asadi Asad Abad Seyyed Abbas Najafizadeh Baytollh Akbari Moghaddam Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) Environmental Energy and Economic Research optimal monetary policy central bank loss amount dynamic stochastic general equilibrium model (dsge) |
| title | Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) |
| title_full | Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) |
| title_fullStr | Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) |
| title_full_unstemmed | Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) |
| title_short | Optimization and Analysis of Central bank Losses for Oil Exporting Economy, Application of DSGE Model (Case study of Iranian Economy) |
| title_sort | optimization and analysis of central bank losses for oil exporting economy application of dsge model case study of iranian economy |
| topic | optimal monetary policy central bank loss amount dynamic stochastic general equilibrium model (dsge) |
| url | https://www.eeer.ir/article_138804_6eb83d52ad7f11041b2e0e6a5e344124.pdf |
| work_keys_str_mv | AT marziehasadiasadabad optimizationandanalysisofcentralbanklossesforoilexportingeconomyapplicationofdsgemodelcasestudyofiranianeconomy AT seyyedabbasnajafizadeh optimizationandanalysisofcentralbanklossesforoilexportingeconomyapplicationofdsgemodelcasestudyofiranianeconomy AT baytollhakbarimoghaddam optimizationandanalysisofcentralbanklossesforoilexportingeconomyapplicationofdsgemodelcasestudyofiranianeconomy |