Document Type : Research Paper
Author
, Department of finance and banking, School of Management and Accounting, Allameh Tabataba’i University
Abstract
Subject and Purpose of the Article: One of the factors of risk growth in banks is incorrect expansionary monetary policy, which leads to adverse effects on economic activities and price levels. In this research, an attempt has been made to investigate the role of banks in influencing monetary policies on macroeconomic variables in the Iranian economy.
Research Method: To achieve this goal and investigate the effect of monetary policy on real variables and price levels in Iran's economy, the Dynamic Stochastic General Equilibrium (DSGE) model and banking system information have been used. The model examined in this article has four sectors: households, economic enterprises (which include intermediate goods producers, consumer and capital final goods producers, and trust companies), banks and monetary authorities (central bank and government).
Research Finding: The results show that the expansionary monetary policy shock has caused production, inflation, private sector consumption, investment, net worth in the economy and lending to increase. Another result obtained from the investigated model shows that the credit shock and the increase in the lending power of the banks cause an increase in production, private sector consumption, investment, net worth and total loans and decrease the level of inflation. Finally, when a shock occurs due to an increase in inflation and a decrease in consumption and investment, this shock causes an increase in the volume of loans, while the level of production remains almost constant.
Keywords
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