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Explaining Monetary Base and Government Expenditure Variations in Iran (in Persian)

Author

Listed:
  • Mojab, Ramin

    (Iran)

  • Barakchian, Seyyed Mahdi

    (Iran)

  • Nili, Farhad

    (Iran)

Abstract

The goal in this research is to obtain some stylize facts about the nature of monetary and fiscal policies in Iranian economy. Different economic and political factors are selected as the potential explanatory variables in monetary base (MB) and government expenditure (GE) regressions and the posterior inclusion probabilities are calculated using a Bayesian model averaging approach. The results show that oil revenue is dominant in GE variations, GE and MB are not sensitive to output variations of different sectors, GE is not sensitive to a change in inflation, MB increases when inflation rises and MB growth rate is higher in average during 2005-2010 period. Therefore, it seems that the policy makers respond to a change in output and prices are not consistent with the macroeconomics recommendations and the economic attitude of the president is more effective. Keywords: Monetary Policy, Fiscal policy, Oil Revenue, Inflation, Output Growth, Bayesian Model Averaging JEL Classification: C11, O04, E62, E52

Suggested Citation

  • Mojab, Ramin & Barakchian, Seyyed Mahdi & Nili, Farhad, 2013. "Explaining Monetary Base and Government Expenditure Variations in Iran (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 6(17), pages 1-16, December.
    • Handle: RePEc:mbr:jmbres:v:6:y:2013:i:17:p:1-16
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    More about this item

    Keywords

    monetary policy; fiscal policy; oil revenue; inflation; output growth; bayesian model averaging jel classification: c11; o04; e62; e52;
    All these keywords.

    JEL classification:

    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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