We document stylized facts of macro variables in Iran's economy and design a Dynamic General Equilibrium model with nominal sector. The model addresses the empirical findings and reflects the policy institutions in Iran's economy. The four sectors of the model, household, firm, government and central bank are specified and calibrated using stylized facts and the structure of fiscal and monitary policy in Iran. Long-run trends and fluctuations of Iran’s macro data implies separable logarithmic utility over consumption and leisure for the representative household, and Cobb-Douglas technology function for the representative firm of Iran’s economy. The demand for money is based on cash-in-advance model. Using this model, we analyze the short-run and long-run response of the economy to the real shock of total factor productivity (TFP), and also fiscal and monetary policy shocks, i.e., tax rate change and money growth shock. The proposed framework may be used as a core part in the models for macro analysis in Iran’s economy.