The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation
The purpose of this paper is to investigate the existence of nonlinear effects of the fiscal policy. Specifically, the asymmetric effects of equal fiscal shocks (of government spending) on macroeconomic production variables are studied. In this regard, a Dynamic Stochastic General Equilibrium (DSGE)...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2018-12-01
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| Series: | فصلنامه پژوهشهای اقتصادی ایران |
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| Online Access: | https://ijer.atu.ac.ir/article_10147_c535bb7c240442a09babf7e3c26fa2aa.pdf |
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| author | zahra sadat raeisi gavgani Teimour Mohammadi farhad qhaffari Abas Memar Nejhad |
| author_facet | zahra sadat raeisi gavgani Teimour Mohammadi farhad qhaffari Abas Memar Nejhad |
| author_sort | zahra sadat raeisi gavgani |
| collection | DOAJ |
| description | The purpose of this paper is to investigate the existence of nonlinear effects of the fiscal policy. Specifically, the asymmetric effects of equal fiscal shocks (of government spending) on macroeconomic production variables are studied. In this regard, a Dynamic Stochastic General Equilibrium (DSGE) model consistent with the conditions of the Iranian economy during the period 1369 – 1393 is used. We present theoretical foundations of the asymmetric effects of fiscal shocks on macroeconomic variables, then we refer to two strands of studies; the first one emphasizes nonlinearity in the effect of fiscal policy, and argues that nonlinear effects are associated with large and persistent fiscal impetus for industrial and developing countries. The second strand of studies emphasizes expectations about fiscal adjustment for debt sustainability during large fiscal adjustments rather than in normal times. The results show that the positive and negative impacts of government expenditures have asymmetric effects on macroeconomic variables. The effect of negative shock of government spending on consumption, investment and production of the private sector as well as total production is stronger, more stable, and larger. On the other hand the effect of positive government spending shock on these variables is smaller having more temporary impact. |
| first_indexed | 2024-03-08T17:44:48Z |
| format | Article |
| id | doaj.art-4d7e3cb3ecf241f5bb76519287e99835 |
| institution | Directory Open Access Journal |
| issn | 1726-0728 2476-6445 |
| language | fas |
| last_indexed | 2024-03-08T17:44:48Z |
| publishDate | 2018-12-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | فصلنامه پژوهشهای اقتصادی ایران |
| spelling | doaj.art-4d7e3cb3ecf241f5bb76519287e998352024-01-02T10:29:31ZfasAllameh Tabataba'i University Pressفصلنامه پژوهشهای اقتصادی ایران1726-07282476-64452018-12-012377377210.22054/ijer.2018.1014710147The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximationzahra sadat raeisi gavgani0Teimour Mohammadi1farhad qhaffari2Abas Memar Nejhad3Ph.D. Student, Department of Economics, Science and Reserch Branch, Islamic Azad UniversityAssociate Professor, Department of Economics,Allameh Tabataba’i UniversityAssociate Professor, Department of Economics,Science and Reserch Branch, Islamic Azad UniversityAssistant Professor, Department of Economics,Science and Reserch Branch, Islamic Azad UniversityThe purpose of this paper is to investigate the existence of nonlinear effects of the fiscal policy. Specifically, the asymmetric effects of equal fiscal shocks (of government spending) on macroeconomic production variables are studied. In this regard, a Dynamic Stochastic General Equilibrium (DSGE) model consistent with the conditions of the Iranian economy during the period 1369 – 1393 is used. We present theoretical foundations of the asymmetric effects of fiscal shocks on macroeconomic variables, then we refer to two strands of studies; the first one emphasizes nonlinearity in the effect of fiscal policy, and argues that nonlinear effects are associated with large and persistent fiscal impetus for industrial and developing countries. The second strand of studies emphasizes expectations about fiscal adjustment for debt sustainability during large fiscal adjustments rather than in normal times. The results show that the positive and negative impacts of government expenditures have asymmetric effects on macroeconomic variables. The effect of negative shock of government spending on consumption, investment and production of the private sector as well as total production is stronger, more stable, and larger. On the other hand the effect of positive government spending shock on these variables is smaller having more temporary impact.https://ijer.atu.ac.ir/article_10147_c535bb7c240442a09babf7e3c26fa2aa.pdffiscal policy shockasymmetric effectsgovernment spendingdynamic stochastic general equilibrium |
| spellingShingle | zahra sadat raeisi gavgani Teimour Mohammadi farhad qhaffari Abas Memar Nejhad The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation فصلنامه پژوهشهای اقتصادی ایران fiscal policy shock asymmetric effects government spending dynamic stochastic general equilibrium |
| title | The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation |
| title_full | The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation |
| title_fullStr | The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation |
| title_full_unstemmed | The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation |
| title_short | The Asymmetric Effects of Fiscal Policy Shocks on Iranian Economy: DSGE Model with Second order Approximation |
| title_sort | asymmetric effects of fiscal policy shocks on iranian economy dsge model with second order approximation |
| topic | fiscal policy shock asymmetric effects government spending dynamic stochastic general equilibrium |
| url | https://ijer.atu.ac.ir/article_10147_c535bb7c240442a09babf7e3c26fa2aa.pdf |
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