In this study, we examined the effects of monetary policy shocks on the performance of the Iranian macroeconomy and the banking system, under the different situations of the Basel II and III capital requirements regulations. By developing a DSGE Model and according to its structural shocks, four observable variables including output gap, bank capital adequacy, inflation, and money base growth r...

We reconsider the role of an inflation conservative central banker in a setting with distortionary taxation. To do so, we assume monetary and fiscal policy are decided by independent authorities that do not abide to past commitments. If the two authorities make policy decisions simultaneously, inflation conservatism causes fiscal overspending. But if fiscal policy is determined before monetary ...

This article examines Taiwan data to determine whether or not output asymmetrically responds to monetary policy shocks. Two asymmetries are defined. For the first asymmetric effect, referred to as the TE effect, an inverted L-shaped aggregate supply curve with negative-sloped equilibrium locus is proposed. This AS curve implies that the effect of an easy monetary policy differs in different inf...

This paper extends Woodford’s (2010) approach to the robustly monetary policy to a general linear quadratic framework. We provide algorithms to solve for a time-invariant linear robustly optimal policy from a timeless perspective and for a time-invariant linear Markov perfect equilibrium under discretion. We apply our methods to a New Keynesian model of monetary policy with persistent cost-push...

This paper aims to investigate the links between exchange rate pass-through (ERPT) and monetary policy. We examine the degree of ERPT to consumer prices for 11 emerging markets (6 inflation targeters and 5 non-inflation targeters) using both multivariate cointegrated VAR (CVAR) and impulse responses derived from the vector error correction model (VECM). Results of cointegration analyses suggest...

We find that between 20 and 25 percent of the negative covariance between excess returns and inflation is explained by shocks to monetary policy variables. The finding is robust to changes in the monetary policy rule that have occured during the 1966-1998 period. The result contradicts the theory that money supply shocks induce a positive correlation between inflation and returns. Our findings ...

The recent housing market experience has led many to concern that the developments in the housing sector are not just a passive reflection of macroeconomic activities but instead might be one of the driving forces of them. In this context, it is crucial to understand the nature of the economy by considering the housing market and build a suitable monetary policy. In this paper, using Bayesian m...

The national economy of most countries is made up of various regions (provinces) with different industrial composition, financial structure, trade relations, and institutional environment. Depending on these characteristics, regions may respond differently to a uniform national macroeconomic policy. Policymakers should consider these heterogeneities to achieve the national development objective...

The problem of inflation has been of central concern to American policymakers since the mid 1960s. Of particular concern has been the rise in the core, or sustained, inflation rate from below the 2 percent level in the early 1960s to near the double-digit level by the late 1970s. Since 1981 a rapid disinflation has occurred, bringing the current inflation rate down to below 5 percent. The recen...