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Business Cycle Features in the Iranian Economy

Author

Listed:
  • Asghar Shahmoradi

    (Faculty of Economics, University of Tehran, Assistant Professor)

  • Ali Tayebnia

    (Faculty of Economics, University of Tehran, Associate Professor)

  • Hossein Kavand

    (Faculty of Economics, University of Tehran, Assistant Professor.)

Abstract

This paper studies the business cycle characteristics of the Iranian economy and the co-movements of macroeconomic variables with oil prices. As is common in most developing and emerging countries, volatility of business cycles in Iran is high. Except for monetary aggregates, co-movements of business cycles are similar to those of developed countries. The theoretical impacts of monetary policy cannot be supported since results show that they have small negative effects on real output. Findings suggest that supply shocks play prominent roles in the macroeconomic fluctuations of the Iranian economy. Moreover, nominal money and price level are procyclical with oil prices. And different price indexes are procyclical with oil prices.

Suggested Citation

  • Asghar Shahmoradi & Ali Tayebnia & Hossein Kavand, 2011. "Business Cycle Features in the Iranian Economy," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 16(1), pages 74-93, winter.
    • Handle: RePEc:eut:journl:v:16:y:2011:i:1:p:74
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    References listed on IDEAS

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    1. Marianne Baxter & Robert G. King, 1999. "Measuring Business Cycles: Approximate Band-Pass Filters For Economic Time Series," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 575-593, November.
    2. Javier Garcia-Cicco & Roberto Pancrazi & Martin Uribe, 2010. "Real Business Cycles in Emerging Countries?," American Economic Review, American Economic Association, vol. 100(5), pages 2510-2531, December.
    3. Mark Aguiar & Gita Gopinath, 2007. "Emerging Market Business Cycles: The Cycle Is the Trend," Journal of Political Economy, University of Chicago Press, vol. 115(1), pages 69-102.
    4. Backus, David K & Kehoe, Patrick J, 1992. "International Evidence of the Historical Properties of Business Cycles," American Economic Review, American Economic Association, vol. 82(4), pages 864-888, September.
    5. Chadha, Bankim & Prasad, Eswar, 1994. "Are prices countercyclical? Evidence from the G-7," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 239-257, October.
    6. Juan Pablo Medina & Claudio Soto, 2005. "Oil Shocks and Monetary Policy in an Estimated DSGE Model for a Small Open Economy," Working Papers Central Bank of Chile 353, Central Bank of Chile.
    7. Fiorito, Riccardo & Kollintzas, Tryphon, 1994. "Stylized facts of business cycles in the G7 from a real business cycles perspective," European Economic Review, Elsevier, vol. 38(2), pages 235-269, February.
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    Cited by:

    1. Mohsen Mohammadi Khyareh & Vahid Taghinejad Omran & Mohammad Ali Ehsani, 2015. "Evaluating The Welfare Aspects Of The Simple Monetary Rules For Iran," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 60(206), pages 141-166, July - Se.

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