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:: Volume 26, Issue 86 (Quarterly Journal Of Economic Research and Policies 2018) ::
3 2018, 26(86): 169-202 Back to browse issues page
Empirical Analysis of Time Inconsistency in IRAN’s Fractional Reserve Banking System
Mohammad mahdi Mojahedi moakhar Dr , . Morteza Khorsandi Dr, Mohammad Esmail Tavasoli Dr
University of Allameh Tabataba’I , m_mojahedi2004@yahoo.com
Abstract:   (96 Views)

Time Inconsistency generally explains the situation that preference and policies are changed during the time. In this regard, Inequity of social discount rate and various kinds of Interest rates is index which is known as Time Inconsistency. Various observations confirm this phenomenon in IRAN’s conventional Banking system. The witnesses such as commercial banking’s debts, difference between Banking Interest Rates, Inflation, and Subjective (time preference) Rate are visible in IRAN’s Economy. In this paper, we are surveying theoretical and empirical approach of Time Inconsistency particularly in IRAN’s economy. In the first step, alternative variable which could be able to explain subjective rates is stated. In this way, the alternatives such as consumption/ income ratio, Inflation’s Expectation, are proved by mathematical deduction. In second step, the paper studied long run correlation of various variables which are introduced for Time Inconsistency by econometrics and calibration methods. As a result, there isn’t long run relationship between variables which are mentioned. So, time inconsistency in fractional reserve banking occurs and it can create serious challenges in continuity of this system through demand for money and banking’s debt.

Keywords: Fractional Reserve Banking System, Time Preference, Interest Rate, Time Inconsistency
Full-Text [PDF 1283 kb]   (33 Downloads)    
Type of Study: Research | Subject: Special
Received: 2017/04/23
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mojahedi moakhar M M, Khorsandi . M, Tavasoli M E. Empirical Analysis of Time Inconsistency in IRAN’s Fractional Reserve Banking System. 3. 2018; 26 (86) :169-202
URL: http://qjerp.ir/article-1-1755-en.html


Volume 26, Issue 86 (Quarterly Journal Of Economic Research and Policies 2018) Back to browse issues page
فصلنامه پژوهشها و سیاستهای اقتصادی Journal of Economic Research and Policies
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