Shahid Beheshti University Journal of Economics and Modelling 2476-5775 1 4 2011 02 20 Surveying of Fiscal Dominance' Effect on Social Welfare in a Dynamic Stochastic General Equilibrium Model Surveying of Fiscal Dominance' Effect on Social Welfare in a Dynamic Stochastic General Equilibrium Model 183 215 57506 FA Majid Sabbagh Kermani Tarbiat Modares University, Faculty member Kazem Yavari Tarbiat Modares University, Faculty member Seyed Ebrahim Hoseini Nasab Tarbiat Modares University, Faculty member Seyed Hadi Mousavi Nik PhD Student in Economic Journal Article 2011 12 01 In this paper, a Dynamic Stochastic General Equilibrium Model have been designed to investigate Fiscal Dominance' effect on social welfare. The designed model has solved by calibration method. Results shows that the degree of fiscal dominance in Iran economy is about 92 percent and decreasing of Fiscal Dominance would lead to decreasing of output loss and increasing of social welfare. However, these results do not mean that the zero degree of fiscal dominance would maximize the social welfare in Iran. Results indicate that increasing of independence of monetary policy to upper than .5 (50 percents) does not any significant positive effect on social welfare. In this paper, a Dynamic Stochastic General Equilibrium Model have been designed to investigate Fiscal Dominance' effect on social welfare. The designed model has solved by calibration method. Results shows that the degree of fiscal dominance in Iran economy is about 92 percent and decreasing of Fiscal Dominance would lead to decreasing of output loss and increasing of social welfare. However, these results do not mean that the zero degree of fiscal dominance would maximize the social welfare in Iran. Results indicate that increasing of independence of monetary policy to upper than .5 (50 percents) does not any significant positive effect on social welfare. https://ecoj.sbu.ac.ir/article_57506_4a8d2878a1ffe32070100ea57573218d.pdf