Volume 6, Issue 21 (12-2015)                   jemr 2015, 6(21): 221-261 | Back to browse issues page

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Sohaili K, Fattahi S, Sorkhvandi M. Evaluation of Iran's Central Bank Monetary Strategies in Respect to Output Gap and Inflation Deviations: Bootstrap Approach. jemr. 2015; 6 (21) :221-261
URL: http://jemr.khu.ac.ir/article-1-852-en.html
Abstract:   (3097 Views)

Monetary policy is one of the most important macroeconomic policies which could be used for achieving economic targets such as reducing the output gap and reducing the inflationchr('39')s deviation from itchr('39')s target level.  These policies can be implemented through the control of volume of money or the rate of interest. Based on economic theories, the Central Bank should conduct monetary policies within a rule-based framework. In periods of positive or negative output gap or when inflationchr('39')s deviation from itchr('39')s target level is positive or negative, different monetary policies should be adopted. Assessment of Central Bank monetary policychr('39')s conformity to rules and the consistency of these policies with economic theories like Taylorchr('39')s theory, is of vital importance. In order to evaluate the consistency of central bank monetary policies with economic theories, this study investigates the monetary strategies of Central Bank regarding the inflationchr('39')s deviation and output gap during the period 1974-2013. It applies the Bootstrap method for this purpose. The result shows that Central Bank does not counteract the output gap during the periods of recession and boom and itchr('39')s reactions to the inflationchr('39')s deviation is in the reverse direction.

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Type of Study: Applicable | Subject: پولی و مالی
Received: 2013/10/12 | Accepted: 2014/09/27 | Published: 2015/12/21

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