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Selecting the Government Financial Rule for Reducing the Negative Effects of the Oil Sanctions on the Selected Macroeconomic Variables in Iran: Adopting the Stock-Flow Consistent Model (in Persian)

Author

Listed:
  • Maghsoudpour, MohammadAli

    (Faculty of Economic and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran)

  • Salimifar, Mostafa

    (Faculty of Economic and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran)

  • Salehnia, Narges

    (Faculty of Economic and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran)

Abstract

Financial rules can prevent budget fluctuations by regularizing the financial relations of the public sector. This research analyzes four financial rules in the framework of the Stock-Flow Consistent model. These rules are government spending as a constant ratio of GDP, government budget deficit as a constant ratio of GDP, government debt as a constant ratio of GDP, and a balanced budget. The simulation results of the research model for 50 years (2011-2061) show that the choice of financial rule can differ depending on the government's goals, the desired time horizon, and the economic conditions. Among the examined rules, government spending as a fixed ratio of GDP is optimal in the condition of oil sanctions, since it reduces the negative effects of oil sanctions on the selected macroeconomic variables of the model. Considering the importance of choosing a financial rule in accordance with changing economic conditions, such as an oil sanction, it is suggested that the rules should be designed considering the requirements of the country's economy and the goals of the policymaker, and get revised with changes in economic conditions or changes in the priority of goals.

Suggested Citation

  • Maghsoudpour, MohammadAli & Salimifar, Mostafa & Salehnia, Narges, 2022. "Selecting the Government Financial Rule for Reducing the Negative Effects of the Oil Sanctions on the Selected Macroeconomic Variables in Iran: Adopting the Stock-Flow Consistent Model (in Persian)," The Journal of Planning and Budgeting (٠صلنامه برنامه ریزی Ùˆ بودجه), Institute for Management and Planning studies, vol. 27(3), pages 75-108, December.
    • Handle: RePEc:auv:jipbud:v:27:y:2022:i:3:p:75-108
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    More about this item

    Keywords

    Oil Sanction; Financial Rules; Government Budget Deficit; Balance Sheet Matrix; Transaction Matrix; Stock-Flow Consistent Model;
    All these keywords.

    JEL classification:

    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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