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Determine the optimal monetary and fiscal policy rules in economy of Iran
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Hasan Farazmand *   , Mojtaba Ghorbannezhad , Abdolah Purjavan |
| , Farazmand_h@scu.ac.ir |
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Abstract: (9359 Views) |
| The aim of this study is to determine the optimal monetary and fiscal policy rules to stabilize production, inflation and income distribution under carrying out energy prices reform scheme. In this regard, using the optimal control theory, a loss function of the monetary and fiscal policymakers which including inflation rate, output gap rate, the Gini coefficient, the deviation of the volume of liquidity growth and the deviation of the volume of government spending growth from the previous period, were minimized using the three constraint equations of Phillips, aggregate demand and income distribution curves. the optimal monetary and fiscal policy rules were derived under carrying out energy prices reform scheme. By solving constraints optimization problem with optimal rules in a macroeconomic model, the optimal values from 1390 to 1394 were predicted. The results suggest that using the optimal monetary and fiscal policy rules, we can improve the performance of the goal macroeconomics variables under carrying out energy prices reform scheme. By adopting optimal rules, inflation, as one of the important problems of the economy of Iran, can be controlled accompanied by to improve in the performance of macroeconomic variables such as economic growth and income distribution. |
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| Keywords: price reform of energy carriers, economy of Iran, optimal control theory, optimal monetary and fiscal policy rules |
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Full-Text [PDF 864 kb]
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Type of Study: Research |
Subject:
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