The Effects of Monetary Policy on Macroeconomic Variables through Credit and Balance Sheet Channels: A Dynamic Stochastic General Equilibrium Approach

Economic policies aimed at managing economic variables in the short and long term have always been of special importance. These seek to reduce fluctuations increase sustainable growth term. One these is monetary policy, which mainly carried out by central banks worldwide. This paper uses Keynesian Dynamic Stochastic General Equilibrium (DSGE) model examine effects policy on real Iranian economy through credit channel balance sheet channel. The presented analyzed information about macroeconomic Iran for period from 1990 2020. obtained results show that with implementation restrictive economy, all productive activities enterprises decreased, this led a decrease household income, turn reduced savings form bank deposits. Because most important sources financing are deposits, ability offer loans was reduced. On other hand, shock associated decline value corporate securities. As result, amount received firms assets. demand loans, intensified initial shock, along reduction banks’ provide lending services. Further, indicate relative success simulating Iran’s macro economy.