evaluation of the welfare effects of different monetary rules during boom and recession periods in the iranian economy

The main objective of this research is to rank different monetary rules in iran based on welfare, considering boom and recession periods. in this study, a stochastic dynamic general equilibrium model of new keynesians is developed for the iranian economy. by introducing six different monetary policy rules, the welfare effects of shocks under these rules are compared. this research answers the question of which monetary policy rule can bring about a higher level of welfare during recession and boom periods, given the structure of the iranian economy. to address this question, the first step involved identifying recession and boom periods in the iranian economy from 1988 to 2022 using the hodrick-prescott filter and the bry-boschan algorithm. subsequently, using existing data from the iranian economy, various models were estimated, and calibration of the models during the recession and boom periods was conducted using results from other studies. finally, the welfare losses of different monetary rules during recession and boom periods were calculated, considering individual shocks as well as the simultaneous introduction of five shocks to the economy. the results of this study indicated that if five shocks (monetary policy shock, preference shock, technology shock, oil revenue shock, and global price shock) are simultaneously applied to the iranian economy, the generalized cabrera et al. (2011) monetary rule experiences lower welfare losses in both recession and boom periods.