EXTENDED ABSTRACT
INTRODUCTION
This paper examines the effects of migration on Iran's business cycles in the framework of a Bayesian dynamic stochastic general equilibrium model. The present study defines migration as a shock, explained as a first-order autoregression process. This shock enters the model through changes in human capital and is effective in causing fluctuations in economic variables by changing the structure of population and human capital. Two tools of variance decomposition and impulse response functions have been used to analyze migration's effects on the Iranian economy's business cycles. Based on the variance decomposition results, the migration shock explains more than 20% of output fluctuations, more than 14% of consumption fluctuations, and more than 10% of housing price fluctuations in the Iranian economy. They are also, based on the results of the impulse response functions of the variables, in response to the shock of migration, output, consumption, investment, capital formation in the housing sector, human capital, employment, wages, and capital stock decrease, while housing prices increase. Finally, based on the results obtained from the estimation of the final likelihood of the model based on the Laplace approximation, different scenarios regarding the effects of immigration on human capital are compared. The results show that the model with a lower ratio of immigrants' human capital compared to internal human capital is accepted.
METHODOLOGY
In this research, the effects of immigration shocks on the dynamics of business cycles are analyzed using a DSGE stochastic dynamic general equilibrium model in a small open economy. For this purpose, seasonal data from 1370 to 1396 have been used in the space of business cycles, and the relationship between the research variables was evaluated using Bayesian econometric methods. In this research, according to Smith and Swensen (2019), a DSGE model for Iran's economy will be specified as a small open economy, which includes households, enterprises, the construction sector, and foreigners. In this model, net migration affects other economic variables through the impact on the population and human capital changes. Finally, for the ratio of the human capital of immigrants to the country and the country's population, three values ​​are considered, which are compared with each other based on the estimation of the final likelihood of the model based on the Laplace approximation.
 
FINDINGS
The data used in this research are presented in Table 1, collected from 1395 to 1370. All the data are seasonally adjusted, and after logarithmization, they have been detrended using the Hodrick-Prescott filter (l=677). 
Table 1. Research data in the period from 1370 to 1395



Variable
symbol
reference


gross domestic product
Y
central bank


Formation of fixed gross capital
X
central bank


private consumption
C
central bank


working population
EMP
Statistics Center


immigrants
V
Statistics Center


Consumer Price Index
CPI
central bank


House price
PH
Statistics Center


Investment in the housing sector 
H
central bank 



   
CONCLUSION
The theoretical foundations, the model structure and the results of using the research data show that migration plays a significant role in the fluctuation of the macroeconomic variables of Iran. This variable affects the labor market, wages, products and other economic variables by affecting human capital and population changes. The experimental evidence and the results of the logarithm of the model correction based on the Laplace approximation show that the level of human capital of immigrants in Iran is lower than that of native people.Most Iranian immigrants immigrated to Iran based on the theory of repulsion, such as war and their countries' internal problems, and based on the spatial theory, due to the neighborhood.The results of the analysis of variance and instantaneous response functions of the DSGE model of this research indicate the adverse effects of immigration on Iran's economy, such as the reduction of production, investment, human capital formation, etc., from its stable state. Population growth has increased housing prices.