The purpose of this article is to analyze the macroeconomic impacts of fiscal policy in Iran using a new-Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. The model takes into account distortionary taxations on wage, dividend, and consumption, while government expenditures are broken down into consumption of goods and services, and investment. The model is calibrated for Iran based...

In the Value Added Tax (VAT) system some goods and services, such as banking services, are exempted from taxes. Based on theoretical foundations, exempt treatment leads to several distortions and inefficiencies in the economy. In order to understand the importance of exemption on macroeconomic fluctuations as well as the fundamental role of financial intermediaries in economy shocks, this study...

Modern policy analysis makes extensive use of dynamic stochastic general equilibrium (DSGE) models. These models differ significantly from earlier generations of large-scale econometric models. I review what I see as major progress in the ability of economists to conduct model-based policy analysis. This progress has come through the evolution in the types of models being used and in a refineme...

Social capital plays a role in many desirable economic outcomes. We analyze how these beneficial effects translate into the performance of economies by developing dynamic stochastic general equilibrium (DSGE) model featuring social explaining Solow residual. then simulate and estimate with Bayesian techniques using Italian data. Our framework fits actual data better than standard DSGE model, su...

We study how total factor productivity (TFP), energy prices and the great moderation are linked. First, we estimate a joint stochastic process for the energy price and TFP and establish that until 1982:II, energy prices negatively affected productivity. This spill-over has since disappeared. Second, we show that within the framework of a Dynamic Stochastic General Equilibrium (DSGE) model, the ...

This study investigates monetary and financial shocks on macroeconomic variables, focusing on the role of banking intervention. For this purpose, a Keynesian dynamic stochastic general equilibrium (DSGE) model is designed for Iran’s economy that involves financial and banking sectors. The results of the model simulation show that the financial accelerator theory works in the Iranian economy. Al...

The purpose of this study is to analyse the dynamic response of a set of euro area macroeconomic variables to monetary policy and technology shocks. We do so by conducting simulations on three different models of the euro area. The first modelling approach corresponds to structural VAR models (SVAR), the second approach uses the NiGEM multi-country model developed by the National Institute of E...

First-order approximation methods are a standard technique for analyzing the local dynamics of dynamic stochastic general equilibrium (DSGE) models. Although linear methods yield quite accurate solutions for a broad class of DSGE models, some important economic issues (e.g., portfolio choice and welfare) cannot be adequately addressed by first-order methods. This paper provides yet another case...

In this study, we conducted an oil prices forecasting competition among a set of structural models, including vector autoregression and dynamic stochastic general equilibrium (DSGE) models. Our results highlight two principles. First, forecasts should exploit the fact that real are mean reverting over long horizons. Second, models not replicate high volatility observed in samples. By following ...