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Money Economy

description222 papers
group17 followers
lightbulbAbout this topic
A money economy is an economic system where goods and services are exchanged primarily through the use of currency, facilitating trade and commerce. It contrasts with barter systems, emphasizing the role of money as a medium of exchange, a unit of account, and a store of value in economic transactions.
lightbulbAbout this topic
A money economy is an economic system where goods and services are exchanged primarily through the use of currency, facilitating trade and commerce. It contrasts with barter systems, emphasizing the role of money as a medium of exchange, a unit of account, and a store of value in economic transactions.

Key research themes

1. How can the structure of money circulation and taxation policies optimize economic robustness and growth?

This theme investigates the Theory of Cycle of Money, which analyzes how money reuse within an economy—shaped by public policies and taxation—affects economic stability, consumption, investment, and overall growth. The focus lies on identifying optimal public and tax policies that maximize the velocity and utility of money circulation, thereby enhancing economic resilience, especially in the face of economic crises. It accounts for the differentiated roles of various economic units (e.g., SMEs versus large firms) and how their tax burdens influence money cycling within the economy.

2025

Key finding: The study establishes that tax policies targeted at lower rates for small and medium enterprises and higher rates for large multinational firms increase the cycle of money within the domestic economy, thereby enhancing...Read more
Key finding: The study establishes that tax policies targeted at lower rates for small and medium enterprises and higher rates for large multinational firms increase the cycle of money within the domestic economy, thereby enhancing economic robustness. It also highlights the role of sectors like factories, health, and education in strengthening the money cycle, proposing that optimized allocation of production units and taxes leads to maximal economic reuse of money, thus supporting social welfare and prosperity.

2025

Key finding: This work rigorously examines the utility function of the Cycle of Money under various scenarios involving enforcement and escape savings, showing how different savings behaviors modulate the effectiveness of money recycling....Read more
Key finding: This work rigorously examines the utility function of the Cycle of Money under various scenarios involving enforcement and escape savings, showing how different savings behaviors modulate the effectiveness of money recycling. Using first-order derivatives and Karush-Kuhn-Tucker conditions, it identifies tax and public policies that enhance consumption and investment by optimizing the velocity of money. This analysis further substantiates the importance of controlling both enforcement and escape savings for maximizing economic efficiency.

2025

Key finding: Applying the Theory of Cycle of Money empirically to Serbia’s economy reveals that Serbia’s cycle of money index aligns closely with the global average, indicating a well-structured economy. The study suggests that Serbia’s...Read more
Key finding: Applying the Theory of Cycle of Money empirically to Serbia’s economy reveals that Serbia’s cycle of money index aligns closely with the global average, indicating a well-structured economy. The study suggests that Serbia’s middle-ranked index reflects moderate economic dynamism, and proposes tax policy adjustments—lower taxes for SMEs and higher for large multinational companies—to further enhance money reuse and economic vigor, thereby strengthening resilience against economic crises.

2. What is the socio-economic and institutional role of money and how does its control affect the stability and democratic governance of the monetary system?

This research theme explores money not as a mere economic mechanism but as a social and political institution central to capitalist economies. It evaluates the concentration of money creation within private finance, the state's dual role as stabilizer and capitalist actor, and the implications for economic inequality, debt, and system instability. It also probes proposals for a public, democratically controlled monetary system to remedy capitalist financial dysfunctions and promote ecological and social sufficiency.

2022

Key finding: Mary Mellor argues that money is a public resource currently captured by private finance capital to serve speculative profits, contributing to widespread public and individual debt. The financial crises exposed the state's...Read more
Key finding: Mary Mellor argues that money is a public resource currently captured by private finance capital to serve speculative profits, contributing to widespread public and individual debt. The financial crises exposed the state's indispensability in stabilizing money but also revealed the lack of democratic control over money creation. The work proposes reclaiming and restructuring the money and banking system as a publicly administered resource to enable equitable, sustainable provisioning aligned with social and ecological sufficiency.

2023, Globalizations

Key finding: This paper critically reevaluates earlier sociological analyses of the US dollar’s global role, incorporating post-GFC monetary trends, and finds existing globalization theories insufficient in macro-sociological treatment of...Read more
Key finding: This paper critically reevaluates earlier sociological analyses of the US dollar’s global role, incorporating post-GFC monetary trends, and finds existing globalization theories insufficient in macro-sociological treatment of the international monetary system. It advocates for integrating sociological monetary theory with empirical studies on central banks, Eurodollar flows, and shadow banking to develop a robust theoretical framework capturing the international monetary system's socio-political dynamics and its societal impacts.

2023, Review of Political Economy

Key finding: John Smithin develops an alternative monetary model rooted in Post-Keynesian realism, emphasizing the endogenous creation of bank credit and the critical role of governments and central banks in economic outcomes. Critically...Read more
Key finding: John Smithin develops an alternative monetary model rooted in Post-Keynesian realism, emphasizing the endogenous creation of bank credit and the critical role of governments and central banks in economic outcomes. Critically engaging with monetary and sociological literatures, the work highlights power relations shaping money’s functions beyond mere means-of-payment, and proposes a macroeconomic framework better suited to address growth, uncertainty, and policy efficacy than mainstream models.

2023, European Journal of Economics and Economic Policies: Intervention

Key finding: This article clarifies core misconceptions about Modern Monetary Theory (MMT), emphasizing its nuanced understanding of money as a social relation involving assets and liabilities, with demand driven by taxation needs rather...Read more
Key finding: This article clarifies core misconceptions about Modern Monetary Theory (MMT), emphasizing its nuanced understanding of money as a social relation involving assets and liabilities, with demand driven by taxation needs rather than legal tender alone. It asserts that MMT recognizes distinctions between inside and outside money, money and the monetary base, and supports active, committee-based monetary policy including quantitative easing, opposing claims that MMT neglects these policies or monetary control mechanisms.

3. How does monetary policy influence income distribution, financial stability, and economic growth in heterogeneous economies?

This theme addresses the distributional and macroeconomic consequences of monetary policy choices, including their effects on income inequality, banking stability, and growth trajectories. It explores empirical and theoretical analyses of how shocks and policies affect heterogeneous households, non-performing loans, banking leverage, and securitization mechanisms, proposing integrated approaches to assess winners and losers of monetary decisions and the systemic risks emerging from shadow banking and financial deregulation.

2025, The journal of money and economy

Key finding: Employing Dynamic Stochastic General Equilibrium models calibrated to the Iranian economy, this paper quantifies the heterogeneous effects of monetary policy shocks on income and consumption distributions across households....Read more
Key finding: Employing Dynamic Stochastic General Equilibrium models calibrated to the Iranian economy, this paper quantifies the heterogeneous effects of monetary policy shocks on income and consumption distributions across households. It finds significant distributional impacts mediated via earnings heterogeneity and asset ownership, suggesting that monetary authorities need to consider inequality outcomes alongside traditional macroeconomic objectives.

2025, Journal of Money and Economy

Key finding: Using a Random-Coefficients modeling approach in a panel of Iranian banks, the study reveals that intra-organizational factors like credit risk and liquidity risk exert heterogeneous and bank-specific effects on banking...Read more
Key finding: Using a Random-Coefficients modeling approach in a panel of Iranian banks, the study reveals that intra-organizational factors like credit risk and liquidity risk exert heterogeneous and bank-specific effects on banking leverage. These differences emphasize the importance of tailored risk and capital regulation strategies to maintain banking system stability in varying institutional contexts.

2024, The journal of money and economy

Key finding: Through regime-switching panel smooth transition regression models, the study links macroeconomic variables—especially oil revenue growth and inflation—to the dynamics of non-performing loans (NPLs) in Iranian banks across...Read more
Key finding: Through regime-switching panel smooth transition regression models, the study links macroeconomic variables—especially oil revenue growth and inflation—to the dynamics of non-performing loans (NPLs) in Iranian banks across oil boom and recession cycles. It finds inflation positively influences NPLs, with loan loss provisions, interest rate spreads, and loan-to-deposit ratios showing asymmetric effects varying by bank quality, highlighting critical risk factors for banking stability.

2023, Journal of Money and Economy

Key finding: Applying quantile regression across G20 economies, the study documents that shadow banking activities exacerbate financial instability particularly in countries with a high shadow banking presence. It highlights the...Read more
Key finding: Applying quantile regression across G20 economies, the study documents that shadow banking activities exacerbate financial instability particularly in countries with a high shadow banking presence. It highlights the regulatory challenge posed by shadow banking entities, especially in circumventing traditional banking oversight, suggesting the need for comprehensive reforms to safeguard financial system robustness.

2024, The journal of money and economy

Key finding: Integrating a Dynamic Stochastic General Equilibrium model extended with shadow banking and securitization variables calibrated to US data, the analysis finds securitization by banks tends to slow economic growth over the...Read more
Key finding: Integrating a Dynamic Stochastic General Equilibrium model extended with shadow banking and securitization variables calibrated to US data, the analysis finds securitization by banks tends to slow economic growth over the long term. The study warns about risks generated by securitization processes, such as asset bubbles and inflationary pressures, recommending caution in promoting securitization as a financing tool.

Related Topics

All papers in Money Economy

2012

The recent financial crisis has shown that the reforming in regulation and supervision is essential. This paper studies whether banking regulation improves bank soundness or more regulation lead to decrease soundness of banking....more
The recent financial crisis has shown that the reforming in regulation and supervision is essential. This paper studies whether banking regulation improves bank soundness or more regulation lead to decrease soundness of banking. Specifically, countries which require banks to report regularly and accurately their financial data to regulators and market participants have sounder banks. In this paper, we test the quadratic relationship between regulation and sound banking with a panel data model during (2000-2009) for selected countries. The dependent variable in the study is the bank's financial soundness as measured by its Z-score. These findings emphasize the importance of regulation on banking system. The results show that regulation and financial soundness have significantly quadratic form because the sign of regulation-squared coefficient is negative and sign of coefficient of regulation is positive and significant, it could be said that quadratic hypothesis of above relation...

2011, Journal of Money and Economy

In Iran, interest rate is regulated by government by setting a ceiling for the credits allocated to various economic sectors. In recent years, the old theory of financial repression in the form of reducing interest rate of credits has...more
In Iran, interest rate is regulated by government by setting a ceiling for the credits allocated to various economic sectors. In recent years, the old theory of financial repression in the form of reducing interest rate of credits has been considered as a necessity to stimulate and encourage investment and economic sectors expansion in Iran. This study investigates the effects of this policy on the growth of investment and production and other macro-economic variables in the context of the economy of Iran. To this end, we modified and extended the ORANI-G CGE model to appropriately present Economy of Iran and to include financial sector. This real- financial CGE model constitutes of 46 sectors producing 60 commodities and services. Then, we used this model to simulate a 4 percent reduction in interest rate of credits in all economic sectors. Results revealed that, following this policy the real GDP and total fixed capital formation will face a growth rate of 1.2 and 1.86 percent, re...

2012, Journal of Money and Economy

One of the complex matters in banking law is the problems and mistakes which occur in the process of bank payments. Mistake of banker or error in processing of information in bank networks may result in payment delay or paying money to...more
One of the complex matters in banking law is the problems and mistakes which occur in the process of bank payments. Mistake of banker or error in processing of information in bank networks may result in payment delay or paying money to the account of a person other than who was really intended. This article is about rules for allocation of losses between account holders implicated and the intermediary bank-based payments. The paper discusses common mistakes and usual forms of unauthorized payments with intermediation of one or more banks. The main idea of this paper is that the bank may be responsible for some errors and mistakes even if there is no agreement about or against this liability.

2013, Journal of Money and Economy

Sudden stops can be characterized by sharp reversals in capital inflows, large declines in output, and steep collapses in real asset prices (Mendoza and Smith, 2009). In almost all recent crises, capital account reversals amounting to...more
Sudden stops can be characterized by sharp reversals in capital inflows, large declines in output, and steep collapses in real asset prices (Mendoza and Smith, 2009). In almost all recent crises, capital account reversals amounting to more than 10% of an afflicted country's GDP have occurred (Calvo and Reinhart, 1999 and Nabli, 1999). More specifically, reversals in capital flows to emerging market countries in the 1990s and early 2000s exerted a substantial influence on the relevant economies affected even leading to financial crises, while, on the whole, international capital reversal has been absent in the case of advanced countries. Another characteristic of recent crises is the swiftness and the magnitude of the crises itself and its impact on asset prices and the exchange rate. The objective of this paper is to examine the role of sudden stops in causing a currency crisis in Asia. Moreover, the herding behaviors on capital flows will be analyzed in Asian emerging countries...

Journal of Money and Economy

The paper aims to examine the impact of financial sanctions on capital inflow and outflow in Iran. The research question is about examining the effect of financial sanctions on FDI inflow and capital outflow in Iran. We used the...more
The paper aims to examine the impact of financial sanctions on capital inflow and outflow in Iran. The research question is about examining the effect of financial sanctions on FDI inflow and capital outflow in Iran. We used the intervention model as an econometric method to estimate the impact during 2005-2019. The paper discussed three periods. From 2005 to 2010, severe financial sanctions negatively affected FDI, and capital outflow was positive. From 2011 to 2015, severe and multilateral financial sanctions were implemented, adversely affecting FDI. There is a positive relationship between financial sanctions and capital outflow. In the third period, i.e., 2016-2019, when financial sanctions and implementation of JCPOA and the withdrawal of the United States happened, the overall effect on FDI inflow is negative. Although Iran absorbed about $2 billion of FDI, with the withdrawal of the United States from JCPOA and the return of secondary U.S. sanctions, the reduction of FDI happened again. On capital outflow, the sanction has a positive effect on capital outflow. Altogether, during 2005-2019, financial sanctions adversely affected FDI inflow and increased capital outflow in Iran.

2012, Journal of Money and Economy

The exchange rate regime in Iran is practically fixed. The Central Bank of Iran (CBI) has committed itself to trying to bring about a particular exchange rate regime to meet two important targets: 1. Sustaining competitiveness of the...more
The exchange rate regime in Iran is practically fixed. The Central Bank of Iran (CBI) has committed itself to trying to bring about a particular exchange rate regime to meet two important targets: 1. Sustaining competitiveness of the economy, 2. Acquiring the share of foreign reserves in monetary base in a predetermined level. Since 2001 the share of foreign reserves in monetary base has increased, which suggests that the sensitivity of CBI toward its second target should have also increased. This study tries to test whether this hypothesis is statistically significant. A Markov Switching model is used to test this hypothesis. The results show that from 2001 the sensitivity of CBI toward its second target has increased significantly, while its sensitivity toward the first target has decreased.

2021, Journal of Money and Economy

Shadow banking is a term that came out of the financial crisis of 2007-2009. There is a belief that shadow banking was one of the crisis reasons. Because the excessive expansion of shadow banking endangers the financial stability of...more
Shadow banking is a term that came out of the financial crisis of 2007-2009. There is a belief that shadow banking was one of the crisis reasons. Because the excessive expansion of shadow banking endangers the financial stability of countries, this paper examines the impact of shadow banking on financial stability using data from 14 countries of the G20 during 2002-2018. We divided countries into four groups according to the level of shadow banking activity; then, we employed the quantile regression method. The results indicated that shadow banking hurts financial stability (positive impact on financial instability) in countries with a high shadow banking index (fourth group countries). One unit of increase in the shadow banking index increases financial instability in the fourth group countries (high shadow banking) by 1.6 units. But in countries where shadow banking is not very strong (other three groups), shadow banking does not significantly affect financial stability.

2021, Journal of Money and Economy

Money laundering is among the most common financial crimes that negatively affect countries' economies and hurt their social and political relations. With the increasing growth of e-banking and the increase in electronic financial...more
Money laundering is among the most common financial crimes that negatively affect countries' economies and hurt their social and political relations. With the increasing growth of e-banking and the increase in electronic financial transactions, the identification of money laundering methods and behaviors has become more complex; because money launderers, by accessing the Internet and using new technologies, find new ways to legalize their illegal income. Although many efforts have been made to identify suspected cases of money laundering and fight against this financial crime, little success has been achieved in this regard, especially in developing countries. Hence, this study tries to identify the risk factors involved in money laundering in banking transactions. To this end, multiple attribute decision-making methods, such as the Shannon entropy method, hierarchical analysis, and two-level fuzzy hierarchical analysis, have been used to assess and score the risk of various transactions in money laundering. The results indicated that the highest risk of money laundering was in the POS transactions.

2021, Journal of Money and Economy

Risk (VaR) using GARCH type models with improved return distribution. Value at Risk (VaR) is an essential benchmark for measuring the risk of financial markets quantitatively. The parametric method, historical simulation, and Monte Carlo...more
Risk (VaR) using GARCH type models with improved return distribution. Value at Risk (VaR) is an essential benchmark for measuring the risk of financial markets quantitatively. The parametric method, historical simulation, and Monte Carlo simulation have been proposed in several financial mathematics and engineering studies to calculate VaR, that each of them has some limitations. Therefore, these methods are not recommended in the case of complications in financial modeling since they require considering a series of assumptions, such as symmetric distributions in return on assets. Because the stock exchange data in the present study are skewed, asymmetric distributions along with symmetric distributions have been used for estimating VaR in this study. In this paper, the performance of fifteen VaR models with a compound of three conditional volatility characteristics including GARCH, APARCH and GJR and five distributional assumptions (normal, Student's t, skewed Student's t and two different Lévy distributions, include normal-inverse Gaussian (NIG) and generalized hyperbolic (GHyp)) for return innovations are investigated in the chemical, base metals, automobile, and cement industries. To do so, daily data from of Tehran Stock Exchange are used from 2013 to 2020. The results show that the GJR model with NIG distribution is more accurate than other models. According to the industry index loss function, the highest and lowest risks are related to the automotive and cement industries.

2013, Journal of Money and Economy

Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the...more
Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the role of international outsourcing in form of trading intermediate products on bilateral trade relations between Iran and China. As an empirical work, we have studied the trade structure of intermediate and final goods between the two countries during the period 1992-2011. Intermediate and final goods traded are classified into three groups: 1) electronic product, 2) automobiles and motorcycles, and 3) apparel and footwear. Observations on such products show that the share of Iran's intermediate trade with China in these three industries to total trade is about 55% on average. We have concluded that trade in intermediate goods between Iran and China has been more volatile than that of final goods.
by Edib Smolo and 
1 more

2012, Journal of Money and Economy

The main purpose of this paper is to trace epistemological roots of conventional and Islamic finance. Based on an extensive literature review, this paper aims to highlight, explain, and discuss an ideal conventional and Islamic financial...more
The main purpose of this paper is to trace epistemological roots of conventional and Islamic finance. Based on an extensive literature review, this paper aims to highlight, explain, and discuss an ideal conventional and Islamic financial system. The ideal conventional financial system is discussed in light of various writings by Smith and Arrow, plus based on Arrow-Debreu model. On the other hand, the Islamic financial system is discussed in light of Qur’anic verses based on which the system is built.
The findings show that the present Islamic finance industry evolved from conventional finance to address a market failure in conventional finance in terms of unmet market demand for Islamic finance products. However, since most practitioners in Islamic finance were bankers and market players from the conventional background, they developed, more often than not, products that are similar to conventional ones albeit with Shari’ah compatibility. Hence, the focus was primarily on avoiding riba while ignoring the first part of the verse 275 of surah al-Baqarah which first ordains exchange contracts. Although the crisis had limited impact on IFI, it is due to the similar nature between the two that IFI is also subjected to the shocks in the conventional financial system. A way forward would be to move towards more risk-sharing products which indicate a robust link between the strength of the financial system and economic growth.

Journal of Money and Economy

Corporate governance of banks is one of the most important structures required by banks to maintain the health and stability of banks, which can play an important role in managing banks' risk. This paper examines the effect of corporate...more
Corporate governance of banks is one of the most important structures required by banks to maintain the health and stability of banks, which can play an important role in managing banks' risk. This paper examines the effect of corporate governance on liquidity risk management, credit risk management, and total bank risk management. We used board structure effectiveness, transparency, and responsibility as corporate governance indicators. The financial ratio approach is also used to measure risk management. The period under review was 2006-2018. In addition to corporate governance criteria, other explanatory variables affecting banks' risk management have also been used. This paper used the performing unit root, cointegration, and F-Limmer tests to ensure panel estimation. Given the impact of past banks' risk management on current risk management, this variable has also been modeled as an explanatory variable. For this reason, the GMM method has been used to estimate the models in question. Given the importance of bank size in corporate governance on bank risk management, Banks are divided into large and small groups, so the effect of corporate governance in large and small banks has also been investigated on bank risk management. The results show that compliance with corporate governance criteria positively affects banks' risk management. However, due to weak corporate governance in large banks, corporate governance in large banks hurts bank risk management.

2021, Journal of Money and Economy

Economic growth is the most common goal in any economy, and capital is one of the most important determinants of growth. In the last few decades, the use of securities in various countries' capital markets has expanded and has become an...more
Economic growth is the most common goal in any economy, and capital is one of the most important determinants of growth. In the last few decades, the use of securities in various countries' capital markets has expanded and has become an essential part of the economic system supplying the capital need for investors and other institutions. This study aims to analyze the effect of securities used to finance banks (securitization) on economic growth. For this purpose, the theoretical analysis method is used in the framework of a Dynamic Stochastic General Equilibrium (DSGE) model. The theoretical model used is based on Frank Ramsey's (1928) economic growth model. To transform this model into a suitable model for research, the shadow banking system and securitization have been added. The model is then simulated using the calibration method and using the real data of the US economy; then, the macroeconomic changes and fluctuations created by bank securities are explained and analyzed. According to the research findings, issuing securities by banks will lead to slower economic growth. Therefore, it is recommended to avoid the use of securitization in banking.

2021, The journal of money and economy

Economic crisis imposes extensive losses on banks and credit institutions, thereby increasing their credit risk and dissolution. The macroeconomic conditions are the major cause of financial stress, the destructive effects of which can...more
Economic crisis imposes extensive losses on banks and credit institutions, thereby increasing their credit risk and dissolution. The macroeconomic conditions are the major cause of financial stress, the destructive effects of which can greatly be reduced by accurate risk management in the banking system. This study aims to examine stress testing in the Iranian banking system by using Iranian banks' data from 2008 to 2017. The results in the panel VAR framework and Monte Carlo simulation by using macroeconomic variables and credit risk show that the Iranian banking system is mostly affected by the scenarios of long-term shock in the country's macroeconomic factors. In other words, changes in one period of the variables have a minimum effect on credit risk. However, a three-period horizon of interest rate and the inflation rate has the maximum effect. In contrast, economic growth has the minimum effect on the degree of default in Iranian banks.

2013, Journal of Money and Economy

Oil price shocks are the main source of macroeconomic fluctuations in oil exporting countries. It is believed that appropriate monetary policy can help to stabilize these unwanted variations toward optimal allocations. A stochastic...more
Oil price shocks are the main source of macroeconomic fluctuations in oil exporting countries. It is believed that appropriate monetary policy can help to stabilize these unwanted variations toward optimal allocations. A stochastic dynamic general equilibrium model featuring the properties of both cost push and wealth effect transmission channels is developed for the Iranian economy. In this context, it is possible to evaluate the role of monetary policy measures to accommodate supply side cost push effects and demand side wealth effect of oil price shock. This paper is intended to investigate the optimal monetary policy strategy for the economy of Iran and calibrated for its structural characteristics and patterns of external shocks. The comparative analysis of alternative monetary policies in terms of 1 author's Ph.D. thesis at Alzahra University 2. Ph.D. student at Alzahra University

2021, Journal of Money and Economy

Stock Exchange Investors have paid more attention to the banking group in recent years so that in many cases, the direction of the banking index has changed the general direction of the market. Therefore, exploring the banking index...more
Stock Exchange Investors have paid more attention to the banking group in recent years so that in many cases, the direction of the banking index has changed the general direction of the market. Therefore, exploring the banking index fluctuation is important from the point of view of investors as well as the direction of the market. The purpose is to examine the effectiveness and direction of news, as one of the most important factors in the formation of volatility, on the banking group index in Tehran Stock Exchange by using 1460 daily records during 2018-2019 and the GARCH family's method. The data were collected for four different newsgroups, including economic, political, psychological, and financial. After that, the news that had more relationship with the banking group was separated to underscore in the weighting stage and divided into the positive and negative news, according to the perspectives of capital market experts and economic elites. The results indicated that newsgroups have a significant effect on the group index, and only the negative political model on the banking group has an asymmetric effect. The results indicated that political and economic news has a positive and significant impact on banking index fluctuations.

2021, Journal of Money and Economy

This study investigates the effect of intra-organizational and macroeconomic factors on banking leverage in selected Iranian banks. For this purpose, after calculation of the Banking Leverage for each bank, by using Random-Coefficients...more
This study investigates the effect of intra-organizational and macroeconomic factors on banking leverage in selected Iranian banks. For this purpose, after calculation of the Banking Leverage for each bank, by using Random-Coefficients Approach (Swamy model), the impact of explanatory variables during the period of 1999-2016 was examined separately by 10 selected Iranian public and private banks. Based on calculations, Melli, Saderat, Refah, and Tejarat Bank had the highest and Sanat-va-Madan, Eghtesad-Novin, and Sepah had the lowest level of banking leverage. Furthermore; the results of estimations show that "organizational" and "structuralvariables" of each bank have different effects on their banking leverage. For example, "credit risk" has a positive and significant effect on bank leverage in "Tejarat", "Saderat", "Refah" and "Sanat-va-Madan" banks. The effect of "liquidity risk" is the same as "credit risk". In general, due to banks' dissimilar structures, organizational and structural variables hold a varying impact on their banking leverage.

2021, Journal of Money and Economy

The aim of this article is to investigate the dynamic correlation between the Global Economic Policy Uncertainty index (GEPU) and Non-Performing Loans (NPL) in Iran. The relationship between economic uncertainty and banking performance...more
The aim of this article is to investigate the dynamic correlation between the Global Economic Policy Uncertainty index (GEPU) and Non-Performing Loans (NPL) in Iran. The relationship between economic uncertainty and banking performance indices is significant because of the systemic importance of banks in every economy. We evaluated this relationship in this developing country, especially under economic sanctions. In this study, we used the Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroskedasticity (DCC-GARCH) to assess the relationship between Global Economic Policy Uncertainty and Non-Performing Loans of Iranian banks using the statistics of these two indicators by R and Eviews programming and statistical software in the period from 2004 to 2021. Our results show that Iranian banks' Non-Performing Loans (NPL) are rather associated with Global Economic Policy Uncertainty (GEPU) during major global shocks such as the global financial crisis in 2008 or the Covid-19 pandemic. However, despite fluctuations in the correlation between Non-Performing Loans and Global Economic Policy Uncertainty over time, this study also illustrates that these correlations in some periods are generally somewhat low that some of the reasons could be the sanctions imposed on Iran's economy and banking system, imposed loans to banks by the government, forced interest rate, etc., which led to a limited connection among Iranian banks and global banking system. To prove this claim we estimate the model for some countries with an open economy, like Japan, Singapore, the US, Turkey, and Spain. The result shows that this correlation is much higher in comparison to Iran.

2021, Journal of Money and Economy

Although gold is no longer a central cornerstone of the international monetary and financial system, it still attracts considerable attention from researchers and investors. Nowadays, many investors manage their risk with valuable assets...more
Although gold is no longer a central cornerstone of the international monetary and financial system, it still attracts considerable attention from researchers and investors. Nowadays, many investors manage their risk with valuable assets such as gold. This paper examines the dynamic relationships between gold and stock markets in the Tehran Stock Exchange. We have applied the Markov switching method to study the role of gold as a hedge or safe haven for the Tehran Stock Exchange risk from 1998 to 2018. The high dependence and low dependence regimes used in the Markov switching model are based on empirical results that show two regimes for all markets under investigation: a low volatility regime and a high volatility regime. The study's findings show that gold can act as a strong hedge and cannot act as a safe haven for risk of The Tehran stock exchange.

2012, Journal of Money and Economy

Price stability has been the foremost task of monetary policy. The information relating to the response of prices to monetary policy shocks is essential for conducting monetary policy in general and for inflation targeting of central...more
Price stability has been the foremost task of monetary policy. The information relating to the response of prices to monetary policy shocks is essential for conducting monetary policy in general and for inflation targeting of central banks in particular. Most of the published empirical studies analyze the response of an aggregate price index like CPI or a consumption deflator and their rates of change to monetary shocks. A limited number of studies that examine the effect of monetary shocks on disaggregate prices use vector auto regression models for the analysis. The results of these studies show that some disaggregated prices increase slightly in response to a contractionary monetary shock. This finding can be inconsistent with the standard theory and is referred to as the "price puzzle" in literature. There is a body of new literature (Bernanke et al. 2005, Boivin, Giannoni and Mihov 2009) that utilizes factor augmented VAR (FAVAR) approach to analyze the effect of mone...

2015, Journal of Money and Economy

Estimates of instrumental rules can be utilized to describe central bank's behavior and monetary policy stance. In the last decade, considerable attention has been given to time-varying parameter (TVP) specification of monetary policy...more
Estimates of instrumental rules can be utilized to describe central bank's behavior and monetary policy stance. In the last decade, considerable attention has been given to time-varying parameter (TVP) specification of monetary policy rules. Constant-parameter reaction functions likely ignore the impact of model uncertainty, shifting preferences and nonlinearities of policymaker's choices. This paper examines the evolution of monetary policy reaction function in Iran via estimating a time-varying parameter (TVP) specification in the 1990:2-2014:4 period. We try to find out whether there is a significant time variation in coefficient of CBI (the Central Bank of Iran) reaction function. The main findings are threefold. First, monetary policy rules changed over time, hence making relevant the application of a time-varying estimation framework. Second, the monetary instrument smoothing parameter is much lower than typically reported by previous time-invariant estimates of policy...

2021, The journal of money and economy

Despite the importance of the business model in implementing strategy, this issue is less addressed than strategy. This important issue regarding banks' business model has received less attention, and research in Iran and other countries...more
Despite the importance of the business model in implementing strategy, this issue is less addressed than strategy. This important issue regarding banks' business model has received less attention, and research in Iran and other countries has caused a deprivation of knowledge. In addition to the scientific pathology of the business model in Iranian commercial banks, the present article seeks to determine the weights of importance and prioritization of the main categories. It also prioritizes and determines the importance of each of the concepts of the main categories of the commercial banking business model. The research method is applied in terms of results and descriptive in terms of purpose and quantitative-qualitative from the data dimension. The research method's strategy in the qualitative part is the grounded theory, and in the quantitative part is the process of hierarchical analysis. The data analysis method in the qualitative part is the coding method, and the quantitative part is based on pairwise comparisons and incompatibility rate analysis. The research community is the experts of commercial banks, and its examples are Mellat, Tejarat, Melli, Sepah, Saderat, Shahr, Eghtesad-e-Novin, and Ayandeh banks. The sampling method is a purposeful judgment with the snowball method and data collection tools in the qualitative part of the interview and review of documents in the quantitative part of the questionnaire. The research findings led to identifying the pathology of Iranian commercial banks' business model in 7 categories and 36 concepts, which are prioritized and contributed based on the importance and role of each of them in the business model.

2012, Journal of Money and Economy

Financial markets have been developed rapidly in recent years. New and sophisticated financial tools have been the cause of these developments which need new controlling systems to prevent crisis. Most of industrial economies have...more
Financial markets have been developed rapidly in recent years. New and sophisticated financial tools have been the cause of these developments which need new controlling systems to prevent crisis. Most of industrial economies have reformed regulatory structure of their financial systems.

2013, RePEc: Research Papers in Economics

OIC members have much potential in their economic development. Therefore, their economic integration leads to more increment for partners and deal with global system as a unique organization. Consequently, studying the convergence of OIC...more
OIC members have much potential in their economic development. Therefore, their economic integration leads to more increment for partners and deal with global system as a unique organization. Consequently, studying the convergence of OIC members and their encountered challenges has especial importance which can assist the policy makers to develop their commercial relationship and consequently employment enhancing and economic situation improvement in future planning. Therefore, in this research the commercial effects of selected OIC members during 2005-2011 were modeled using gravity method. Results showed that from the basic gravity equation, the economy size of other 6 OIC members is the main determinant in the Iranian bilateral trade relationship. Thereby, 1% increase in the economy size of other 6 OIC members, leads to 0.91% increase in the volume of trade inflows between considered OIC members.

1997, Dutch central bank Research Memorandum …

This paper presents a new version of the econometric model that is used to forecast banknotes in the Netherlands.

Journal of Money and Economy

This study investigates monetary and financial shocks on macroeconomic variables, focusing on the role of banking intervention. For this purpose, a Keynesian dynamic stochastic general equilibrium (DSGE) model is designed for Iran's...more
This study investigates monetary and financial shocks on macroeconomic variables, focusing on the role of banking intervention. For this purpose, a Keynesian dynamic stochastic general equilibrium (DSGE) model is designed for Iran's economy that involves financial and banking sectors. The results of the model simulation show that the financial accelerator theory works in the Iranian economy. Also, the intermediary role is confirmed by the impulse response function. In other words, economic policies can impress on macroeconomic indicators more when banks intervene in the economy. Therefore, to control the effects of economic shocks on banks' performance, it has been suggested that monetary policymakers pay attention to the important roles of financial markets in the transfer mechanism and monetary policy intensity. On the other hand, because of mandatory rules of interest rates determination, banks have to establish a commission and nonprofit services instead of sharing income to decrease the effect of economic shocks.

Journal of Money and Economy

In the aftermath of the global financial crisis (2007-2009), policymakers in the developing countries and emerging economies have generally relied on macroprudential policies to achieve financial stability. Since the banking system's...more
In the aftermath of the global financial crisis (2007-2009), policymakers in the developing countries and emerging economies have generally relied on macroprudential policies to achieve financial stability. Since the banking system's vulnerability plays an essential role in financial instability, and the banking system's stability is exposed to vulnerability, we examine macroprudential policies' effectiveness in reducing banking vulnerability and economic instability through containing credit growth. We estimated a dynamic panel for 14 Iranian banks using GMM and Arellano-Bovar / Blundell-bond two-stage estimators during 2009-2018. The results indicate that the increase in lending rates in the interbank market leads to the banking system's contraction of lending capacity. The positive and significant effect of the economic growth index indicates the banks' procyclical behavior. That financial institutions in the business cycles behave procyclical in lending. The diminishing effect of the macroprudential policy index on the bank credit expansion indicates that macroprudential authority and policy tools' application reduces the banking system's instability and vulnerability. Therefore, to reduce financial intermediation instability, the financial sector regulator can institutionalize macroprudential policies.

2021, The journal of money and economy

The present study investigates the impact of macroeconomic and bank-specific variables on non-performing loans (NPLs). To avoid the identification problem, two models are employed to address this impact. The first one tests the effect of...more
The present study investigates the impact of macroeconomic and bank-specific variables on non-performing loans (NPLs). To avoid the identification problem, two models are employed to address this impact. The first one tests the effect of macroeconomic variables including the growth of oil revenues, inflation, and the growth of GDP without the oil sector on the growth of NPLs. Data is quarterly over the period 2004:3 to 2019:3. The transition variable in this setup is the growth of oil revenues and its threshold is 9 percent, which divides the sample into oil booms and oil recessions. According to the results, inflation has a significant positive effect on NPLs. During the oil boom, oil revenues decrease the NPLs. Due to the immense size of the government and its current and capital expenditures, when oil revenues are lower, the government forces banks to allocate loans to finance projects with long maturity. Furthermore, the present study used PSTR to test the impact of bank-specific variables consisting of interest rate spread, loan loss provision, loan to deposit ratio, and NPLs. To do so, monthly data of 10 banks is used over 2016:04 to 2020:12. The transition variable is the interest rate spread at 1 percent, which categorizes the banks into two groups of good and bad. Good banks collect deposits with a low-interest rate and allocate high-rate loans with less chance of default. So, interest spread is the most important prominent determinant of decreasing NPLs, while the loan to deposit ratio is dependent on the banks belonging to which group. For good banks, the loan to deposit ratio decreases the NPLs, while for bad banks, it worsens the growth of NPLs.

Journal of Money and Economy

Foreign Direct Investment (FDI) is frequently regarded as a key driver of global economic integration because it brings job opportunities, capital investment, and business experience. The current study examines the impact of foreign...more
Foreign Direct Investment (FDI) is frequently regarded as a key driver of global economic integration because it brings job opportunities, capital investment, and business experience. The current study examines the impact of foreign direct investment on Afghanistan's economic growth using time-series data from 2007 to 2019, which are collected from the World Bank and the International Monetary Fund's annual macroeconomic data sources for the country. Foreign direct investment (FDI), trade (Trd), inflation (InfR), and real interest rate (Int) are independent variables for regressing on this country's gross domestic product (GDP), while "GDP" is as a dependent variable. The method of ordinary least squares (OLS) was utilized to investigate the impact of these variables on Afghanistan's economic growth. For unit root test, the Augmented Dickey-Fuller (ADF) one was utilized, while co-integration, Granger causality, and the Vector Error Correction Model (VECM) were all used to capture two-way linkages between variables and were shown to hold in the long run. Our findings indicate that foreign direct investment and trade have a negative and significant impact on Afghanistan's economic performance in the short run but that all variables except inflation have a positive and significant impact on economic growth in the long run. According to the study, a rigorous policy mix is required to absorb "FDI" while supporting infant industries and reducing Afghanistan's balance of payments deficit for growth and future development.

2012

This paper seeks to evaluate the effects of expansionary monetary policy by the central bank on inflation, output and employment in a limited-participation model for different parameters value of inter-temporal elasticity of substitution...more
This paper seeks to evaluate the effects of expansionary monetary policy by the central bank on inflation, output and employment in a limited-participation model for different parameters value of inter-temporal elasticity of substitution and the Frisch (inverse of the labor supply) elasticity. To this end, a modified cash in advance model in line with Lucas (1990), Christiano (1991) and Fuerst (1992) is utilized to account for liquidity effect and anticipated inflation effect simultaneously. The utility function in this model has a CRRA specification in order to perform the sensitivity analysis of the key variables of the model. A range of parameter values for the economy of Iran is used to show the dependency of the results on the size of the coefficient of relative risk aversion and the Frisch elasticity. The simulation results, given the structure and limitation of our model, show that the injection of liquidity to the banking system is inflationary and is not a reliable policy t...

Journal of Money and Economy

Failure to timely identify the occurrence of various shocks in the foreign exchange market due to the close relationship with the monetary, macroeconomic, and financial uncertainty can lead to crises and imbalances. In this paper, the...more
Failure to timely identify the occurrence of various shocks in the foreign exchange market due to the close relationship with the monetary, macroeconomic, and financial uncertainty can lead to crises and imbalances. In this paper, the effect of exchange rate and investor confidence on monetary and economic uncertainty in Iran is investigated, specifying a Multivariate GARCH model and the Granger-causality method over 2001-2018. The research findings have shown a significant positive correlation between exchange rate and macroeconomic uncertainty in the short run. But, there is no twoway Granger relationship between the real exchange rate, investor confidence in financial markets, and money growth uncertainty. Exchange rate uncertainty affects the real economy through a channel other than the capital market. Also, there is a significant effect of Investor confidence on monetary uncertainty in the short run. As a result, monetary uncertainty is affected by investor confidence uncertainty just through movements in money growth.

2013, Journal of Money and Economy

Determining how monetary policy makers react to changes in key economic variables has been of major interest to monetary economists. Estimates of monetary policy rules (reaction functions) are a widely used method for doing this. Behavior...more
Determining how monetary policy makers react to changes in key economic variables has been of major interest to monetary economists. Estimates of monetary policy rules (reaction functions) are a widely used method for doing this. Behavior differs under different policy regimes, as in rule-based systems or chronic inflation. In practice, estimates of instrument rules have been used to describe how the central bank alters its policy in response to expected macroeconomic events. In this paper we provide linear and non-linear estimates for various instrument rules for Iran. Linear estimates show that monetary policy in Iran tends to accommodate rather than counteract inflationary pressures. More generally, the estimates indicate that Central Bank of I. R. Iran does not systematically follow any of the well-known instrument rules or hybrid types. Non-linearity tests were performed and the null hypothesis of non-linearity of the monetary policy reaction function with respect to inflation ...

2021, Journal of Money and Economy

This paper examines the hedging effectiveness of gold futures for the stock market in minimizing variance and downside risks, including value at risk and expected shortfall using data from the Iran emerging capital market during four...more
This paper examines the hedging effectiveness of gold futures for the stock market in minimizing variance and downside risks, including value at risk and expected shortfall using data from the Iran emerging capital market during four different sub-periods from December 2008 to August 2018. We employ dynamic conditional correlation models including VARMA-BGARCH (DCC, ADCC, BEKK, and ABEKK) and copula-GARCH with different copula functions to estimate volatilities and conditional correlations between Iran gold futures contract return and Tehran stock exchange main index return. The empirical results reveal that the dynamic conditional correlations switch between positive and near-zero values over the period under study. These correlations are high and positive during the major national currency devaluation and are low near to zero during other times. Out-of-sample one-step-ahead forecasts based on rolling window analysis show that DCC and ADCC multivariate GARCH models outperform other models for variance reduction, while a more interesting finding is that the copula-GARCH model outperforms other models for downside risks reduction.

2011, Journal of Money and Economy

We examine permanent effects of monetary expansion in an economy where access to credit for financing consumption and investment is limited and consumers and firms are cash-constrained. The main difference between our model with those of...more
We examine permanent effects of monetary expansion in an economy where access to credit for financing consumption and investment is limited and consumers and firms are cash-constrained. The main difference between our model with those of Cooley-Hanson (1989) and Walsh (2003) is that investment, in addition to consumption, is subject to a cash-constraint. In this respect, our model is similar to Stockman (1981) and Abel (1985) but different from them in that they do not provide for labor-leisure choice. Moreover, in contrast to Stockman and Abel we follow Svensson's (1985) timing sequence in that the asset market opens after the goods market. A version of Cooley and Hanson model is calibrated with the data on the economy of Iran. We compare the business cycles and output and consumption moments generated from simulated data to the moments extracted from the actual data. From the impulse-response functions we also derive the effect of a positive monetary shock on output and inflat...

2020, Journal of Money and Economy

The national economy of most countries is made up of various regions (provinces) with different industrial composition, financial structure, trade relations, and institutional environment. Depending on these characteristics, regions may...more
The national economy of most countries is made up of various regions (provinces) with different industrial composition, financial structure, trade relations, and institutional environment. Depending on these characteristics, regions may respond differently to a uniform national macroeconomic policy. Policymakers should consider these heterogeneities to achieve the national development objective. Using separate VAR models to investigate the regional effects of a uniform policy neglects the spillover effects across regions. The GVAR approach models the links between units (such as regions) using the weighted average of different macroeconomic aggregates. Since Iran is a regionally dispersed country, this motivates us to analyze whether or not a standard monetary policy has different effects on its provinces' unemployment and inflation rates using a GVAR approach during 2005q1-2016q1 period. Results indicate that one standard deviation positive monetary shock at the national level can significantly reduce unemployment in some provinces. These responses are similar in terms of timing, but their intensity is different. Also, this positive shock has a positive effect on inflation in all provinces. All responses are approximately similar in terms of timing. Despite this similarity, shock responses vary in terms of intensity.

Journal of Money and Economy

Over the last decades the research on monetary policy has largely concentrated on the impact of monetary authorities' decisions on inflation and the fine-tuning of the macroeconomic, so that distributional effects of monetary policy which...more
Over the last decades the research on monetary policy has largely concentrated on the impact of monetary authorities' decisions on inflation and the fine-tuning of the macroeconomic, so that distributional effects of monetary policy which are non-trivial has been ignored. A view that has become increasingly popular since the financial crisis 2008 is that expansionary monetary policy can exacerbate inequality. There is some recent empirical evidence that even in an era of low inflation rates; monetary policy shocks have persistent effects on the distribution of income and consumption across households. However, there has been little formal analysis of "winners" and "losers" from monetary policy. This paper investigates the distributional impact of monetary policy using the data of the Iranian economy based on the Dynamic Stochastic General Equilibrium Models (DSGE) approach. In this framework, the monetary shock via heterogeneous earnings channel effects two typical household's income and consumption distribution. As the monetary shock have different effects on the consumption and income of each of typical households relying on model's results, so the distributional effect of monetary policy is confirmed, the reason that monetary authorities must consider distributional effects of their policy besides other goals. The micro-based approach of study is the paper innovation which has been done for the first time in Iran.

2012, Journal of Money and Economy

This paper examines the effects of selected macroeconomic variables on the stock market index in Iran. Using quarterly data, we examine the relationships between the Tehran Stock Index (TSI) and five macroeconomic variables which consist...more
This paper examines the effects of selected macroeconomic variables on the stock market index in Iran. Using quarterly data, we examine the relationships between the Tehran Stock Index (TSI) and five macroeconomic variables which consist of gross domestic product, nominal effective exchange rate, money supply, gold coin price and investment in housing sector from 1996:1 to 2008:1.Various econometric analyses such as Co-integration and Vector Error Correction Method (VECM) are employed on time series data. It finds that Iran's stock market index is positively influenced by the growth rate of the GDP, the money supply and negatively affected by the gold prices, the private sector investment in housing sector and the nominal effective exchange rate.

2020, Journal of Money and Economy

With the onset of the financing crisis in the real sector of the economy and the intensification of shortcomings in the banking system of Iran in recent years, the issue of capital raising has been seriously considered by economic and...more
With the onset of the financing crisis in the real sector of the economy and the intensification of shortcomings in the banking system of Iran in recent years, the issue of capital raising has been seriously considered by economic and banking experts to improve the health and stability of banks and their credit provision. What has been critical in this regard is the effects of capital raisings on the liquidity creation and credit provision of the banks. Therefore, using data of 29 banks during the period 2008 to 2017, and the econometric method of dynamic panel data, the relationship between the capital raising and the liquidity creation and credit providing has been studied. For this purpose, in two steps, first, the effect of capital raising in general on the liquidity creation and credit of banks, and in the next step, the impact of different methods of capital raising on these factors has been studied. The results of the estimations show that an increase in total capital will lead to a rise in liquidity creation in banks. In examining the effect of various methods of capital raising on liquidity creation, however, only the method of cash contribution and retained earnings can have a positive effect on liquidity creation, and other techniques show adverse effects. Also, based on the results of the proposed models, banks' capital raising has harmed their credit provision. It means that banks have allocated the resources from capital raisings to things other than providing loans to customers.

Journal of Money and Economy

The merger of banks is one of the methods for reforming the structure of banks, which has attracted Iranian banking policymakers in recent years. In the process of merging, paying attention to its effects can help to integrate banks. In...more
The merger of banks is one of the methods for reforming the structure of banks, which has attracted Iranian banking policymakers in recent years. In the process of merging, paying attention to its effects can help to integrate banks. In Iran's banking network, financing of production is one of the main concerns of banking policymakers. Therefore, it is important to study the effect of banks' integration on financing. In this paper, considering the importance of this issue, using the financial statements of banks in the period 2006-2018, and the Panel Data method, the effect of the merger of banks on financing has been investigated. The static method has been used to integrate banks. For this reason, banks have been considered in terms of size and health. The results of the survey indicate that the merger of small banks with large banks and the merger of healthy banks, as compared to other options, have a more positive effect on the supply of facilities.

2021, Journal of Money and Economy

This study aims at getting a better performance for optimal stock portfolios by modeling stocks prices dynamics through a continuous paths Levy process. To this end, the share prices are simulated using a multi-dimensional geometric...more
This study aims at getting a better performance for optimal stock portfolios by modeling stocks prices dynamics through a continuous paths Levy process. To this end, the share prices are simulated using a multi-dimensional geometric Brownian motion model. Then, we use the results to form the optimal portfolio by maximizing the Sharpe ratio and comparing the findings with the outputs of the conventional model. To examine the robustness of the results, we have evaluated its performance for different investment horizons and various volumes of price information over a long period (approximately twenty years) in the Tehran Stock Exchange (TSE). Findings indicate that within the trading dates spanning the interval 24-Mar-2001 to 19-Sep-2020, the return of the portfolios obtained from applying this simulation scheme for maximization of Sharpe ratio is (244% on average) higher and their risk (standard deviation) are lower (1227% on average) than those realized by the conventional methods. Additionally, a comparison of the simulation approach with a performance of the actual market portfolios indicates that the Sharpe ratios of the simulation method are higher (0.055% on average) than those resulting from the total market performances. The results of the stochastic dominance test show that our proposed strategy has a first-order stochastic dominance (FSD) over the conventional one and market portfolios, that means at each level of cumulative distribution, the Sharpe ratio of our method is higher, and as FSD test makes no assumptions about the curvature of investors' utility functions, these results do not depend on the degree of risk aversion of investors, and as long as investors prefer a higher Sharpe ratio, they would be better off if they follow our proposed strategy.

2020

Iranian banking network policymakers are focused on bank consolidation as one of the reform policies in recent years. But before merging banks, it is necessary to examine their effects. Loans are one crucial item in the banks' balance...more
Iranian banking network policymakers are focused on bank consolidation as one of the reform policies in recent years. But before merging banks, it is necessary to examine their effects. Loans are one crucial item in the banks' balance sheets that are affected by bank consolidation. In the Iranian banking network, loans are offered to various economic sectors. What is important for banking policymakers is how the structure of loans will change as banks merge. Also, the effect of bank consolidation on loan structure is affected by the bank's ownership and its performance. Therefore, in this paper, we investigate the impact of bank mergers on loan structure of banks, using panel data model and financial statements of Iranian banks in 2006-2018. For this purpose, 28 models have been designed. Results indicate the merger of banks and the creation of private banks have a positive effect on the loan supply to services and the business sector. The merging of banks and the creation o...

2012, Journal of Money and Economy

Determining the driving forces of economic growth has a paramount importance in economic studies. Early studies suggested physical capital accumulation as the main driving force of growth. However, the recent studies try to resolve the...more
Determining the driving forces of economic growth has a paramount importance in economic studies. Early studies suggested physical capital accumulation as the main driving force of growth. However, the recent studies try to resolve the flaws of neo classical school on growth by expanding the concept of capital equipment and machinery to a wider range of human knowledge, on one hand, and institutions, rules and regulations as social capital, on the other. In fact, this strain of economics has become more prevailed recently. The present study, using Hausman, Pritchett and Rodrik (2005) methodology, aims to investigate the impact of rules and regulation reforms of developmental plans on the acceleration of Iran economic growth over 1338-1386 (1960-2008) period. The results of three econometric methods including Gombit, Logit and Probit models show that economic reforms of the developmental plans in Iran's economy has had a significant positive impact on growth.

2019, Theoretical Archaeology Group (TAG) Conference, University College London, 16-18 December

Money is a commonplace of complex societies, and evidence for its production and use appears in the archaeological record at multiple scales: from individual coins, dies, and weights, to mint buildings, metallurgical workshops, and mining...more
Money is a commonplace of complex societies, and evidence for its production and use appears in the archaeological record at multiple scales: from individual coins, dies, and weights, to mint buildings, metallurgical workshops, and mining complexes. The character, scope, and volume of this evidence means that archaeology can offer significant and unique contributions to wider anthropological and sociological debates concerning the socio-cultural processes by which money comes into being: how are objects transformed into money, how are different forms of money rendered legitimate or illegitimate, and how are the social conventions behind money maintained or challenged by its producers and (non)users? This session explores the social production of money and moneys in past societies, with a focus on five key themes:
1) The assignation of value to monetary media
2) Legitimation and validation of moneys
3) Fungibility and commensuration of moneys
4) Money and institutions
5) Hierarchies of money

2020, Journal of Money and Economy

Iranian banking network policymakers are focused on bank consolidation as one of the reform policies in recent years. But before merging banks, it is necessary to examine their effects. Loans are one crucial item in the banks' balance...more
Iranian banking network policymakers are focused on bank consolidation as one of the reform policies in recent years. But before merging banks, it is necessary to examine their effects. Loans are one crucial item in the banks' balance sheets that are affected by bank consolidation. In the Iranian banking network, loans are offered to various economic sectors. What is important for banking policymakers is how the structure of loans will change as banks merge. Also, the effect of bank consolidation on loan structure is affected by the bank's ownership and its performance. Therefore, in this paper, we investigate the impact of bank mergers on loan structure of banks, using panel data model and financial statements of Iranian banks in 2006-2018. For this purpose, 28 models have been designed. Results indicate the merger of banks and the creation of private banks have a positive effect on the loan supply to services and the business sector. The merging of banks and the creation of state-owned banks will also have a positive impact on the loan supply to the industry and mining, construction, and housing sectors. Also, banks merger has a positive effect on the loan supply to services and the business sector.

2013, Journal of Money and Economy

Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the...more
Iran-China relations are deeply rooted in history and have been enhanced recently with bilateral cooperation in the areas of energy, arms sales, trade, political cooperation and cultural ties. The objective of this paper is to analyze the role of international outsourcing in form of trading intermediate products on bilateral trade relations between Iran and China. As an empirical work, we have studied the trade structure of intermediate and final goods between the two countries during the period 1992-2011. Intermediate and final goods traded are classified into three groups: 1) electronic product, 2) automobiles and motorcycles, and 3) apparel and footwear. Observations on such products show that the share of Iran's intermediate trade with China in these three industries to total trade is about 55% on average. We have concluded that trade in intermediate goods between Iran and China has been more volatile than that of final goods.

2020, Journal of Money and Economy

We seek to determine the optimal amount of the insurer's investment in all types of assets for a small and closed economy. The goal is to detect the implications and contributions the risk seeker and risk aversion insurer commonly make...more
We seek to determine the optimal amount of the insurer's investment in all types of assets for a small and closed economy. The goal is to detect the implications and contributions the risk seeker and risk aversion insurer commonly make and the effectiveness in the investment decision. Also, finding the optimum portfolio for each is the main goal of the present study. To this end, we adopted the optimal asset-liability management (ALM) method to control the firm's risk of financial stability and growth by balancing the assets and liabilities of the firm. In the process, stochastic interest rates and inflation risks were taken into account according to the expected utility maximization framework. All assets were established and calculated by the Kalman Filter with the stochastic interest rate following the Hull-White model; an additional stochastic process models the inflation risk. To consider the stochastic process, we employed the geometric Brownian motion in the liability process to ensure a definite liability value. We chose Iran's Social Security Organization as our sample insurer company since it has a portfolio of five types of assets and four types of liabilities, and operates in a small and closed economy. By Applying the ALM method with the stochastic control theory approach, we acquire the optimal investment strategies for insurers to minimize their risk. Our findings demonstrate the effects of model parameters, such as the degree of risk-taking on the insurer decision.

Journal of Money and Economy

In the Iranian economy, part of the government's fiscal policies and liabilities is always financed by banks. As government debt to banks increases, the private sector's access to loans and facilities is limited. It can cause undesirable...more
In the Iranian economy, part of the government's fiscal policies and liabilities is always financed by banks. As government debt to banks increases, the private sector's access to loans and facilities is limited. It can cause undesirable macroeconomic outcomes. This study investigates the macroeconomic effects of government debt on banks in Iran over 1972-2016 by using an SVAR model. Results show that government debt to banks does not significantly affect the aggregate demand ratio to aggregate supply and GDP per labor. Still, it significantly increases the real exchange rate and decreases the nontradable goods' ratio to tradable goods prices. In the long-run, the real exchange rate, the ratio of non-tradable goods to tradable goods price, and the general price level changed by 34.46, 20.95, and 46.4 percent, respectively, which can be explained by the government debt to banks. Results indicate that the government policy manages the Iranian economy.

2020, Journal of Money and Economy

The merger of banks is one of the methods for reforming the structure of banks, which has attracted Iranian banking policymakers in recent years. In the process of merging, paying attention to its effects can help to integrate banks. In...more
The merger of banks is one of the methods for reforming the structure of banks, which has attracted Iranian banking policymakers in recent years. In the process of merging, paying attention to its effects can help to integrate banks. In Iran's banking network, financing of production is one of the main concerns of banking policymakers. Therefore, it is important to study the effect of banks' integration on financing. In this paper, considering the importance of this issue, using the financial statements of banks in the period 2006-2018, and the Panel Data method, the effect of the merger of banks on financing has been investigated. The static method has been used to integrate banks. For this reason, banks have been considered in terms of size and health. The results of the survey indicate that the merger of small banks with large banks and the merger of healthy banks, as compared to other options, have a more positive effect on the supply of facilities.
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