Journal of Economic Research (Tahghighat- E- Eghtesadi)

Journal of Economic Research (Tahghighat- E- Eghtesadi)

Investigating and Comparing the Role of Goals and Rules on the Welfare Measure of the Central Bank in Iran Economy

Document Type : Research Paper

Authors
alireza erfani 1
azadeh talebbeidokhti 2
1 Associate Professor of Semnan University, Faculty of Economics
2 PhD student in monetary Economics at University of Semnan
10.22059/jte.2016.57601
Abstract
In this paper, by using a model of the new Keynesians, we investigated the role of the central bank's accountability to shocks that causes deviations in the performance of the monetary policymakers. For this purpose, we used quarterly data for 69: 1 to 93: 3, and estimated the basic equations of the new Keynesians model. Then, By calculating the optimal values for the central bank's accountability to the two potential sources of deviations from the goals of economic stability and deviation of commitment to rules, we compared the loss of central bank to the loss of social. The results showed that the degree of central bank's accountability to commitment an instrumental rule is less than the degree of the accountability to achieve the goals of economic stability. Also, the central bank with applying Reforms in the implementation of its policy by optimal response to both types of deviations can be close to the results of the welfare society.
Then, in order to compare the importance of accountability of the central bank to achieve both goals, we considered two cases. The results showed that in the period of study in Iranian economy, the main objective of monetary policymaking has been more focused on stability of the economic goals but, the importance of commitment to follow an announced rule and accountability to that rule is too low, so that, it had no impact on the welfare function of the central bank.
JEL Classification: E52, E58 
 
Keywords
Economic stability
Regularity in monetary policy
Central Bank's accountability
Iran Economy

  1.  

    1. باستانی، ایمان (1393). آزمون ناسازگاری زمانی در اقتصاد ایران، مجلۀ تحقیقات اقتصادی، 49 (4)، 699- 727.
    2. ختایی، محمود؛ سیفی­پور، رویا (1385). ابزارها و قواعد شناخته­شدۀ سیاست‌های پولی در اقتصاد ایران، مطالعۀ موردی: برنامۀ سوم توسعۀ اقتصادی و اجتماعی، مجلۀ تحقیقات اقتصادی، 41 (2)، 233-267.
    3. درگاهی، حسن؛ شربت­اوغلی، رویا (1389). تعیین قاعدۀ سیاست پولی در شرایط تورم پایدار اقتصاد ایران با استفاده از روش کنترل بهینه، مجلۀ تحقیقات اقتصادی، 45 (93)، 1-27.
    4. عرفانی، علیرضا؛ طالب بیدختی، آزاده (1392). سرعت مجاز سیاست بهینۀ پولی در اقتصاد ایران، مجلۀ تحقیقات مدلسازی اقتصادی، 4 (12)، 1-27.
    5. عرفانی، علیرضا؛ طالب بیدختی، آزاده (1392). ارزیابی و مقایسۀ قواعد ابزاری سیاست پولی در اقتصاد ایران، مجلۀ تحقیقات اقتصادی، 48 (4)، 145- 166.
    6. فرزین­وش، اسداله؛ برخورداری، سجاد (1389). ساختار اقتصادی، اهداف سیاستی و نرخ سود بهینه در تورم هدف، سیاست­های اقتصادی (نامۀ مفید)، 78 (1)، 33-46.
    7. Bade, R. & Parkin, M. (1988). Central bank laws and monetary policy, department of Economics, University of Western Ontario London, Ontario, Canada.
    8. Barro, R.J. & Gordon, D.B. (1983). Rules, discretion and reputation in a model of monetary policy.
    9. Dincer, N. & Eichengreen, B. (2013). Central Bank Transparency and Independence: Updates and New Measures, BOK Working Paper, 21.
    10. Rogoff, K. (1985). The Optimal Degree of Commitment to an Intermediate Monetary Target, the Quarterly Journal of Economics, 100, 1169-1189.
    11. Romer, D. (2006). Advanced macroeconomics, the McGraw- Hill Companies, Third Edition.
    12. Stracca, L. (2006). A Speed Limit Monetary Policy Rule for the Euro Area, Working Paper Series, 600.
    13. Taylor, J.B. (1993). Discretion versus policy rules in practice, Carnegie Rochester Conference Series on Public Policy, 39, 195- 214.
    14. Taylor, J.B. (2013). The Effectiveness of Central Bank Independence versus Policy Rules, Business Economics, 48 )3).
    15. Walsh, C.E. (2001). Speed Limit Polices: The Output Gap and Optimal Monetary Policy, CESifo Working Paper 609.
    16. Walsh, C.E. (2003). Accountability, Transparency, and Inflation Targeting, Journal of Money, Credit, and Banking, 35(5), 829-849.
    17. Walsh, C.E. (2007). Optimal Economic Transparency, International Journal of Central Banking, University of California, Santa Cruz.
    18. Walsh, C.E. (2010). Monetary Theory and Policy, Third Edition, the MIT Press, 640.
    19. Walsh, C.E. (2014). Goals and rules in central bank design, International Journal of Central Banking Conference, Wellington, New Zealand.

     

Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 51, Issue 1
Winter 2016
Pages 175-203

  • Receive Date 22 April 2015
  • Revise Date 06 October 2015
  • Accept Date 14 February 2016