IDEAS home Printed from https://ideas.repec.org/a/ris/qjatoe/0298.html
   My bibliography  Save this article

Investigating the Effects of Taxation on the Profit of Bank Deposits on Inflation and GDP of Iran's Economy in the Form of a Dynamic General Equilibrium Model (DSGE)

Author

Listed:
  • Yosefizadeh, Hasan

    (Phd student of Abhar Islamic Azad University)

  • Khalili, Farzaneh

    (Assistant Professor of Abhar Islamic Azad University)

  • Nadri, Kamran

    (Associate Professor of Economics at Imam Sadegh University)

Abstract

In Iran's economy, the bank interest rate (interest) is determined by order, and due to high inflation rates, the real interest rate becomes negative and financial repression occurs. In this research, the effect of increasing the interest rate of bank facilities on the macroeconomic indicators of Iran has been investigated in the form of a New Keynesian Stochastic Dynamic General Equilibrium (DSGE) model. In order to achieve the goal of the research, in the form of a Dynamic Stochastic General Equilibrium (DSGE) model, in the period of 1987-2020, we estimated the model in MATLAB 2017 software, which includes the household sector, entrepreneurs, producers, government and monetary policy. Also, in order to match the reality of the country, the oil sector was included in the model. In this research, due to the fact that the bank interest rate is mandatory, the rate of changes in the volume of deposits was entered into the model as a shock instead of the tax shock on deposit interest. The results of the research show that the shock from the deposit interest tax has caused a decrease in inflation, a decrease in consumption in the short term, a decrease in investment and an increase in production in the long term. Based on the results of the research, it is recommended to tax the interest of bank deposits in Iran

Suggested Citation

  • Yosefizadeh, Hasan & Khalili, Farzaneh & Nadri, Kamran, 2023. "Investigating the Effects of Taxation on the Profit of Bank Deposits on Inflation and GDP of Iran's Economy in the Form of a Dynamic General Equilibrium Model (DSGE)," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 10(1), pages 59-88, June.
    • Handle: RePEc:ris:qjatoe:0298
    as

    Download full text from publisher

    File URL: https://ecoj.tabrizu.ac.ir/article_15643_989c56b304674ed62d1db395193c6c23.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    stochastic dynamic general equilibrium; bank deposit interest tax; bank interest rate; rate of changes in the volume of deposits;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies

    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:ris:qjatoe:0298. 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: Sakineh Sojoodi (email available below). General contact details of provider: https://edirc.repec.org/data/fetabir.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.