%0 Journal Article
%T The Effectiveness of Monetary Policy on Macroeconomic Variables
%J Journal of Economic Research (Tahghighat- E- Eghtesadi)
%I University of Tehran
%Z 0039-8969
%D 2008
%\ 10/22/2008
%V 43
%N 2
%P -
%! The Effectiveness of Monetary Policy on Macroeconomic Variables
%K Inflation
%K interest rate
%K monetary policy
%K Simultaneous Equation System
%R
%X This paper concentrates on investigating the effect of monetary instruments on macroeconomic variables using structural model over the period 1981- 2006. The main results of simulation show that decrease in the interest rate, increases investment but it's effect on production (GDP) is negligible. This weak effect is probably due to some factors such as, the introduction of some new projects with low returns, allocation of some public resources towards the policy implementation and its subsequent inflationary impacts. In addition, the results show that simultaneous decrease in the loan interest rate and public investment could offset the effectiveness of the interest rate policy and decrease public investment and GDP. Also, the results show that there is a direct relationship between public and private investment.
JEL Classification: M12
%U https://jte.ut.ac.ir/article_27209_da18f38b5f70cf8dd381da56ba736c20.pdf