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Paper Information

Journal:   IRANIAN JOURNAL OF APPLIED ECONOMICS   Spring 2018 , Volume 8 , Number 24 #r00452; Page(s) 39 To 48.

The Effect of Monetary and Fiscal Policies on Iran's Economy in the Situation of Economic Downturn

* Salmas Azad University, Salmas, Iran
The applied policies by the government and also other executive departments has been important and as an influential variable during the economic downturn. So the need to pay attention to these policies and its impact on economic variable made us to investigate the impact of monetary and financial policies on the country's economy during the period of economic downturn. The statistical population of this study is all macroeconomic data of the country and its sample case includes also the macroeconomic data of Iran in the years 1972-2015. In order to assess the impact of monetary and financial policies on the country's economy in the context of stagnant periods, we evaluate the research model by ARDL method. Also, the years of recession in this research are calculated based on the Hodrick Prescott filtering method. The results of the study indicate the significant and positive effect of financial policy and negative and significant effect of monetary policy on economic growth during the period of downturn. Accordingly one can claim that the application of financial policies and the control of monetary policies can increase the amount of production in society and reduce the unemployment rate. Also private sector investment variables and oil revenue have a positive and significant effect on production and economic growth during the downturn period which is consistent with theoretical foundations of research.
Keyword(s): monetary policy,financial policy,economic downturn,ARDL econometrics method
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