T his paper investigates the movement between stock market bubbles and fluctuations in aggregate variables within a DSGE model for the Iranian economy. We apply a new Keynesian monetary framework with nominal rigidity in wages and prices based on the study by Ikeda (2013), which is developed with appropriate framework for the Iranian economy. We consider central bank behavior differe...

Financial markets are one of the most fundamental markets in any country. In the financial markets, the securities market and the foreign exchange market are sensitive sectors. These two markets are affected by fluctuations and economic cycles so reflect economic changes rapidly. Changes in the returns of one market due to arbitrage conditions during time lead to changes in the returns of other...

  The main purpose of present study is to analyze the relationship between stock and exchange markets in two Asian countries, Iran and South Korea. A monthly time series of stock price and exchange rate are used over the period 2002: 05 - 2012: 03. The data is collected from the Central Bank of each country and WDI. The calculated stock return and real exchange rate change are used in analysis....

In 2011, China continues to be the world’s largest recipient of direct foreign investment—which in 2010 totaled US$105 billion. China is also the world’s second largest economy after the U.S. Once a staunchly Communist state, China now advocates a “social market economy” as its business system. The purpose of this paper is threefold. First, this paper seeks to understand what is meant by a “soc...

A traditional understanding of a `buyer's market’ and a `seller's market’ associates them with a certain type of economic system, asserting that a market economy systems inevitably result in a buyer's market and a planned economy systems bring about a seller's market. This paper introduces a new concept – the `policy-buyer's market’ or more fully the policy-created buyer’s market. It points out...

regulation is a modern concept which has emerged out of and evolved in the context of economic development in general and the relationship between market and government in particular. it signifies a different meaning with the past. even nowadays we are faced with various meanings of regulation within the economic legal systems; meanings that have moved away from its early definition, and hence,...

EXECUTIVE SUMMARY The building of a market economy in the former communist countries requires the creation of markets, of market-oriented enterprises, and of the wide range of institutions and business practices needed to support them. Some aspects of a market economy can and have been created quickly in these transition economies, in particular through market liberalisation and privatisation. ...

We develop a simple behavioral macromodel to study interactions between the real economy and the stock market. The real economy is represented by a Keynesian-type goods market approach while the setup for the stock market includes heterogeneous speculators. Using a mixture of analytical and numerical tools we find, for instance, that speculators may create endogenous boom-bust dynamics in the s...