IDEAS home Printed from https://ideas.repec.org/a/mbr/jmbres/v7y2015i22p533-568.html
   My bibliography  Save this article

Oil Price Shocks and Monetary Policy in Iran: The New Keynesian Approach (in Persian)

Author

Listed:
  • Faraji, Maryam

    (Iran)

  • Afshari, Zahra

    (Iran)

  • Ebrahimi, Ilnaz

    (Iran)

Abstract

Oil price shocks are the major source of economic instability in oil exporting countries, as well as Iran. Also the appropriate monetary policy can play an important role in decreasing these undesirable variations. In this paper, to investigate the optimal monetary policy rule after an oil price shock for the economy of Iran, a New Keynesian Multi sectors Dynamic Stochastic General Equilibrium framework model with emphasis on oil sector optimization and considering the subsidy of energy price, is designed. The model is estimated by a Bayesian method and then it is used to evaluate the effect of different monetary policy rules. Our main findings reveal that among three different monetary policy rules under consideration i.e. CPI inflation targeting, PPI inflation targeting and real exchange rate targeting in the 1367:1-1391:1 period, PPI inflation targeting policy rule is more effective in stabilizing the inflation. Moreover compare to other policy rules, It is accompanied by the lowest welfare losses.

Suggested Citation

  • Faraji, Maryam & Afshari, Zahra & Ebrahimi, Ilnaz, 2015. "Oil Price Shocks and Monetary Policy in Iran: The New Keynesian Approach (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. 7(22), pages 533-568, January.
    • Handle: RePEc:mbr:jmbres:v:7:y:2015:i:22:p:533-568
    as

    Download full text from publisher

    File URL: http://jmbr.mbri.ac.ir/article-1-235-en.pdf
    Download Restriction: no
    File URL: http://jmbr.mbri.ac.ir/article-1-235-en.html
    Download Restriction: no
    File URL: http://jmbr.mbri.ac.ir/article-1-235-fa.html
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mbr:jmbres:v:7:y:2015:i:22:p:533-568. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: M. E. (email available below). General contact details of provider: https://edirc.repec.org/data/mbcbiir.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.