A survey on the effect of interest rate increase of bank loans in Iran’s economic growth in the sterotype an newkeynesian dynamic stochastic general equilibrium model

doi:10.22055/jqe.2013.12295

A survey on the effect of interest rate increase of bank loans in Iran’s economic growth in the sterotype an newkeynesian dynamic stochastic general equilibrium model

https://doi.org/10.22055/jqe.2013.12295

Volume 10, Issue 1 - Serial Number 1

Vol. 10, No. 1, Spring 2013

Spring 2013

Pages 1-31

Quarterly Journal of Quantitative Economics (JQE)

Document Type : Research Paper

Abstract

Abstract
In economics of Iran, bank interest rate is determined by imperative form and by considering high inflation rates in Iran, it is per formed negative real interest rate and financial repression. In this research, by Mackinnon and Shaw’s view, it has been investigated the effect of bank loans interest rate in the investment and production in economics of Iran. In order to, the first it was designed an DSGE model for economics of Iran. This model includes four parts household, firm, trading banks, government and central bank. The results indicated that based on bank credits interest rate increased but is reduced investment, bank credits and GDP. Thus the increase of bank loans interest rate is caused to reduce the economic growth. Therefore, Mackinnon and Shaw ۥtheory is rejected in economics of Iran.

Keywords

interest rate

Economic Growth

DSGE

bank loan

XML

PDF 1.17 M