Economic Strategy

Economic Strategy

Modeling the asymmetric behavior of Central Bank in Iran: a strategy for resistance economy

Document Type : Original Article

Authors
Kiomars Sohaili 1
shahram fattahi 2
nadia yari 3
1 Professor ,Department of Economics, Faculty of Economics and Accounting, Razi University, Kermanshah,Iran,
2 Associate Professor, Department of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran
3 PHD student , Department of Economics, Faculty of Social Sciences, Razi University, Kermanshah, Iran.
10.22034/es.2024.414568.1702
Abstract
The central bank in Iran has been at the center of resistance economic policies and strategies for maintaining the value of the national currency. Maintaining the value and status of the national currency has been one of the main strategies of the resistance economy as well as the neutralization of economic sanctions policies in recent years. This issue has gained importance and a higher position with the intensification of sanctions. This issue has been closely related to the behavior of the central bank. Modeling and predicting the behavior of the central bank has always been one of the most attractive topics in the monetary and banking field. These models allow the different effects of monetary policies on economic variables such as inflation, growth evaluate economic, interest rate and unemployment, which is very important and basic information for policy makers. These models facilitate the improvement of performance and forecasts of the central bank. Considering this issue, the aim of this study was to model the asymmetric behavior of the central bank in Iran during the period of 1360-1400 with the non-linear ARDL (NARDL) approach and quantile regression. The experimental results of this study showed that the production gap, inflation gap and exchange rate had a positive and significant effect on the growth rate of the nominal money volume, and these effects were strengthened in the high quantiles of the growth rate of the nominal money volume. Also, based on other results of this study, the variables of inflation rate gap, production gap and exchange rate have an asymmetric behavior in Iran. Also, according to the results of the NARDL method, the impact of the effective variables on the growth rate of the money volume has been asymmetric.
Keywords
asymmetric behavior
central bank
interest rate
inflation gap
production gap
exchange rate

Subjects

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  • Receive Date 13 September 2023
  • Revise Date 05 December 2023
  • Accept Date 25 December 2023