Flexible Inflation Targeting with Emphasis on Asset Prices in the Economy of Iran: Stochastic Optimal Control Approach
Hassan
Dargahi
Department of Economics, Faculty of Economics and Political Science, Shahid Beheshti University
author
Abdolazim
Aghatabay
M.A. in Economics, Shahid Beheshti University
author
text
article
2014
per
The purpose of this paper is to develop an optimal monetary rule within the framework of flexible inflation targeting for the central bank of Islamic Republic of Iran with emphasis on asset prices such as exchange rate, stock prices, housing prices, and gold prices. The paper is comprised of two stages. In the first stage, the parameters of aggregate demand and aggregate supply are estimated for oil exporting and small open economy (case of Iran) using ARDL method. In the second stage, in order to obtain an optimal monetary rule for flexible inflation targeting purposes, we resort to minimizing the central bank's loss function which is comprised of inflation gap as well as output gap using the estimated aggregate demand and aggregate supply as constraints. The problem of minimizing the Central bank loss function is equivalent to an optimal control problem of a nonlinear objective function subject to linear constraints. To solve this problem we use the state space and dynamic programming approach. To appraise the significant effect of asset prices in setting up the optimal monetary rule, we re-estimate the aggregate demand and aggregate supply using asset prices. Comparing the variance of inflation in the two cases shows no statistical significant. Thus the central bank does not need to consider asset prices variation in designing the optimal monetary rule.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
1
37
https://ecoj.sbu.ac.ir/article_53493_acbeb323c91a5b0dbd0e320f00e223a3.pdf
The Impact of Regulatory Quality on Inflation Rate: Some Evidence from Selected MENA Countries
Hassan
Heidari
Associate Professor of Economics, Urmia University, Department of Economics
author
Roghayyeh
Alinezhad
M.A. in Economics, Urmia University, Department of Economics
author
Rana
Asghari
M.A. in Economics, Urmia University, Department of Economics
author
text
article
2014
per
One of the most important objectives of all economic policymakers is achieving an acceptable level of prices growth, so that it would help economic growth and economic stability. From the opinions of the experts about inflation can be said despite being inflation is an economic phenomenon, but it does not arise from economic principles solely and in this direction institutional factors and social infrastructure are an important factors affecting the prices growth especially in developing countries. Also many analysts believe that between institutional factors, the regulatory quality is one of the most important factors influencing on prices growth. Hence, this study aims to investigate the impact of the regulatory quality on inflation rate using statistical data of 16 selected MENA countries for the period of 1996-2012. For this purpose, the paper estimates the relationship between variables in Panel Smooth Transition Regression (PSTR) model and using Non-linear Least Squares (NLS) method. Results of the model estimation reject the linearity hypothesis, and indicate existence of one continuous transition function with two regimes that gives a threshold at regulatory quality of -0.94 in this group of countries. The results indicate that regulatory quality index, openness index and GDP coefficients are negative in two regimes and numerical values of these negative coefficients are increased in second regime. Moreover, government consumption expenditure and liquidity coefficients are positive and significant in two regimes and numerical values of these positive coefficients are decreased in second regime.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
39
67
https://ecoj.sbu.ac.ir/article_53492_17bbae4df5960bb81490444ba421fefd.pdf
The role of population age structure in the households’ demand for real estate investment
Mohammad
Noferesti
Department of Economics,Faculty of Economics and Political Science, Shahid Beheshti University
author
Smira
Sadeghi Goghari
M. A. in Economics, Shahid Beheshti University
author
text
article
2014
per
Changes in the population age structure of the Iranian society, due to the baby boom of the 1360’s had serious consequences and raised several questions. One is how the household demand for investment in real states is affected by such a drastic change in the population age distribution. In finding a suitable answer to this question, this paper specifies an investment demand function for real state that one of its explanatory variables is changes in population age structure. The specified function is estimated using ARDL approach, in line with the co-integration methodology, by the aid of time series data for the period 1345-1385. The obtained results suggest that an increase in the portion of middle age population leads to an increase in demand for real estate investment. In 15 to 20 years from now (1407-1412), when who were born in the first half of the 1360’s reach the age of 40-44, the demand for investing in real state will increase, thereafter will decrease gradually.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
69
87
https://ecoj.sbu.ac.ir/article_53491_08b7cf605cf4b33ee036bc76b44d5f12.pdf
Presenting the Prediction Model of Iran’s Electricity Annual Consumption by means of Narx Neural Network and Studying Effect of Targeted Subsidies on it
Mohammadreza
Hamidizadeh
Professor of Management, Shahid Beheshti University, Department Of Management And Accounting
author
Mohammadjavad
Kargar
MA in Information Technology Engineering
author
Mohammad
Hamidian
Ph.D. Candidate, Shahid Beheshti University, Department of Management And Accounting
author
text
article
2014
per
In this research a model has been designed for predicting Iran’s electricity annual consumption based on economic criteria and by means of artificial neural networks. Moreover, the effect of implementing targeted subsidies plan on annual electricity consumption of Iran has been studied. In such a way that Narx neural network takes Iran population and GDP variables as input and generates Iran annual electricity consumption as output. For testing and teaching the designed network, data related to the years 1362 to 1389 were collected and the last 4 years data has been collected for testing the network performance. For studying the accuracy degree of designed network, Perceptron neural network model and Arima time series model also were designed .And comparison of results shows that Narx neural network is more powerful in predicting Iran electricity consumption. Considering the key factors affecting electricity consumption in this model, Iran electricity consumption in the years before implementing the targeted subsidies could be predicted with a high accuracy and therefore the amount of electricity consumption in Iran during the year 1390, 91 and 92 shows the effect of subsidies targeting plan on Iran electricity consumption in first year of implementing it. The tangible decrease in electricity consumption in that year in comparison to designed model is a bare witness for this effect. Findings of research shows that according to Narx neural network and the graduate effect of time on it ,this model could be used for predicting the annual consumption of electricity inside the country.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
89
113
https://ecoj.sbu.ac.ir/article_53490_8d6d55c0e19123d54dd0ddce4ed6c32e.pdf
Estimating Consumers’ Willingness to Pay for Organic Broiler by Heckman two-Stage Approach
Mohammad i
Kavoosi Kalasham
Assistant Professor, Department of Agricultural Economics, Faculty of Agricultural Sciences, University of Guilan
author
Morteza
Tahami Pour Zarandi
Department of Economics, Faculty of Economics and Political Science, Shahid Beheshti University
author
Morteza
Heydari Shalmani
MA in Agricultural Management, Islamic Azad University
author
text
article
2014
per
Food problem and food security is one of the most fundamental challenges of world’s increasing population. Concerns about consuming antibiotics in raising poultry are increasing and using fewer antibiotics can play an important role in society health improvement. This study investigates Rasht city citizens' willingness to pay for organic broiler using Heckman two-stage valuation approach. Requested data set were obtained through questionnaires and reporting from 200 individuals. Applied sampling method is random approach and sample size determined based on Bartlett choice table. The results revealed that among investigated variables, knowledge of organic broiler and attitude variables had positive and significant effect on acceptance of additional willingness to pay for mentioned product and the level of willingness to pay. Also, the average consumers’ willingness to pay for each kilogram of organic broiler is 21.42% more than an ordinary broiler. It is advised that in order to improve health status and establishing organic agriculture system in Iran, complete advertising about organic broiler advantages and remained antibiotic detriments in ordinary broiler provided.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
115
130
https://ecoj.sbu.ac.ir/article_53489_65ddcd12a3415d91904eacfb456678f4.pdf
Theoretical Analysis of Financial Innovations’ effect on Financial Leverage Fluctuations and Financial Crisis
Mohammad
Vaez Barzani
Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan
author
Behbam
Ebrahimi
Ph.D. Candidate, Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan
author
Rahim
Dalali
Department of Economics, Faculty of Administrative Sciences and Economics, University of Isfahan
author
Majid
Fakhar
Associate Professor, University of Isfahan, Department of Math Sciences
author
text
article
2014
per
According to researchers, fluctuation of financial leverage is one of the most important causes of instability of financial systems and its vulnerability to exogenous shocks and financial crises. Hence, developing theoretical models to explain origins of financial leverage fluctuation and its role in occurrence of financial crises becomes very important. In this study, by using a new definition of aggregated financial leverage, the role of financial innovations (qualitative development of financial system) in fluctuations of financial leverage and occurrence of financial crisis is modeled theoretically. The theoretical model is based on the neoclassical growth theory of Frank P. Ramsey (1928) which will be solved and discussed explicitly. The model is calibrated by using Iran economic data and the cyclical variation of aggregated financial leverage is estimated. The results of the study show that outbreak of financial innovations would cause expansion of credit supply and through its effect on physical capital; the aggregated financial leverage will change proportionately. In return, revision of supervisory regulations would induce financial leverage to move in opposite side. Accordingly, frequent occurrence of financial innovations and regulation revision would cause financial cycles. On the other hand, if some financial innovations occur prior to regulations revision, the extent of variations may become enough to generate financial crisis.
Journal of Economics and Modelling
Shahid Beheshti University
2476-5775
4
v.
16
no.
2014
131
150
https://ecoj.sbu.ac.ir/article_53488_3a80ac1186af2819baed3c88c0df6ebe.pdf