International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Asymmetric Effects of Monetary Shocks on Economic Growth & Inflation: Case Study in Iran
Akbar Komijani, Mostafa Sargolzaei, Razieh Ahmad, Marzieh Ahmadi

In this paper, benefiting from annual data from 1973 to 2008 in the economic or Iran, we have studied unexpected asymmetric effects of money on production and inflation. Respective concerns of monetary policy making deals with how unexpected changes alter production and level pries. In this paper, unexpected monetary shocks have been analyzed using the rest of function of money supply. According to applicable results obtained in this respect, unexpected monetary decrease has influenced on economic growth to great extent (compared with unexpected monetary increase) and unexpected monetary increase has largely influenced inflation (compared with unexpected monetary decrease). Consequently, we come up with this conclusion that although a policymaker is able to increase economic growth through unexpected increase of monetary volume, this policy shall bring about more inflation, on the one hand. On the other hand, if the policymaker decreases monetary growth supply unexpectedly in order to decrease inflation, this shall bring about more effects toward decrease of economic growth.

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