Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression
The main purpose of this article is to investigate the effect of central bank independence on the establishment of Political Business Cycles (PBC) in Iran. For this purpose, the modified model of Shi and Svensson (2006) in the framework of the Smooth Transition Autoregressive Regression (STAR) durin...
| Main Authors: | , , , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
Semnan University
2021-11-01
|
| Series: | مدلسازی اقتصادسنجی |
| Subjects: | |
| Online Access: | https://jem.semnan.ac.ir/article_5997_ebd96484dd21c958d7e7b51de3df4542.pdf |
| _version_ | 1797296708321804288 |
|---|---|
| author | Ali Hussein Samadi Ahmad Jafari Samimi Ahmad sadraei Javaheri mosleme ebrahimi |
| author_facet | Ali Hussein Samadi Ahmad Jafari Samimi Ahmad sadraei Javaheri mosleme ebrahimi |
| author_sort | Ali Hussein Samadi |
| collection | DOAJ |
| description | The main purpose of this article is to investigate the effect of central bank independence on the establishment of Political Business Cycles (PBC) in Iran. For this purpose, the modified model of Shi and Svensson (2006) in the framework of the Smooth Transition Autoregressive Regression (STAR) during the period of 1978-2018 has been used. The results, in addition to confirming the linear relationship between the variables, showed that in the election period, for the values of PBC (ratio of budget deficit to GDP) above the threshold, central bank independence, a positive and significant effect, and for values below threshold has had a significant negative effect on PBC. Another finding of this paper is that the sum of the coefficients of central bank independence in the two regimes indicates the negative effect of increasing central bank independence on PBC. Therefore, it is suggested that, in addition to restricting the use of oil revenues, increasing the central bank's independence in the true sense of the word should be considered in order to gradually reduce PBC. |
| first_indexed | 2024-03-07T22:08:42Z |
| format | Article |
| id | doaj.art-f3b8289c82c54a6ab0b38422d57f48f6 |
| institution | Directory Open Access Journal |
| issn | 2345-654X 2821-2150 |
| language | fas |
| last_indexed | 2024-03-07T22:08:42Z |
| publishDate | 2021-11-01 |
| publisher | Semnan University |
| record_format | Article |
| series | مدلسازی اقتصادسنجی |
| spelling | doaj.art-f3b8289c82c54a6ab0b38422d57f48f62024-02-23T18:42:51ZfasSemnan Universityمدلسازی اقتصادسنجی2345-654X2821-21502021-11-01649312410.22075/jem.2021.24731.16445997Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive RegressionAli Hussein Samadi0Ahmad Jafari Samimi1Ahmad sadraei Javaheri2mosleme ebrahimi3Professor in Economics, Department of Economics, Shiraz UniversityProfessor in Economics, Department of Economics, University of MazandaranAssociate Professor in Economics, Department of Economics, Shiraz UniversityPh.D. Student in Economics, Department of Economics, Shiraz UniversityThe main purpose of this article is to investigate the effect of central bank independence on the establishment of Political Business Cycles (PBC) in Iran. For this purpose, the modified model of Shi and Svensson (2006) in the framework of the Smooth Transition Autoregressive Regression (STAR) during the period of 1978-2018 has been used. The results, in addition to confirming the linear relationship between the variables, showed that in the election period, for the values of PBC (ratio of budget deficit to GDP) above the threshold, central bank independence, a positive and significant effect, and for values below threshold has had a significant negative effect on PBC. Another finding of this paper is that the sum of the coefficients of central bank independence in the two regimes indicates the negative effect of increasing central bank independence on PBC. Therefore, it is suggested that, in addition to restricting the use of oil revenues, increasing the central bank's independence in the true sense of the word should be considered in order to gradually reduce PBC.https://jem.semnan.ac.ir/article_5997_ebd96484dd21c958d7e7b51de3df4542.pdfpolitical business cyclescentral bank independencebudget deficit. electionsiran |
| spellingShingle | Ali Hussein Samadi Ahmad Jafari Samimi Ahmad sadraei Javaheri mosleme ebrahimi Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression مدلسازی اقتصادسنجی political business cycles central bank independence budget deficit. elections iran |
| title | Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression |
| title_full | Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression |
| title_fullStr | Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression |
| title_full_unstemmed | Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression |
| title_short | Effect of Central Bank Independence on Political Business Cycles in Iran: An Application of Smooth Transition Autoregressive Regression |
| title_sort | effect of central bank independence on political business cycles in iran an application of smooth transition autoregressive regression |
| topic | political business cycles central bank independence budget deficit. elections iran |
| url | https://jem.semnan.ac.ir/article_5997_ebd96484dd21c958d7e7b51de3df4542.pdf |
| work_keys_str_mv | AT alihusseinsamadi effectofcentralbankindependenceonpoliticalbusinesscyclesinirananapplicationofsmoothtransitionautoregressiveregression AT ahmadjafarisamimi effectofcentralbankindependenceonpoliticalbusinesscyclesinirananapplicationofsmoothtransitionautoregressiveregression AT ahmadsadraeijavaheri effectofcentralbankindependenceonpoliticalbusinesscyclesinirananapplicationofsmoothtransitionautoregressiveregression AT moslemeebrahimi effectofcentralbankindependenceonpoliticalbusinesscyclesinirananapplicationofsmoothtransitionautoregressiveregression |