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The Dynamic Regional Effects of Monetary Policy on Employment in Iran (TVP-FAVAR Approach)

Author

Listed:
  • Barkhordari, Sajjad

    (Assistant Professor of Economics, University of Tehran)

  • Forughi Far, Mohsen

    (PhD candidate in Economics, University of Arizona, US)

Abstract

The regions in a country respond differently to monetary shocks. The purpose of this paper is to analyze the effects of monetary shocks on employment in regions with non-systematic mechanism of monetary transmission. To achieve this purpose, we used TVP-FAVAR approach to describe monetary shocks in the thirty provinces over 1384:1- 1394:4. The results show that there are different responses to monetary shocks in Iranian provinces. Also, the response of each province is different in terms of time, and the economic conditions play main roles in response of province to monetary shocks. The findings of this paper represent evidences of asymmetric effects of monetary policies in Iranian regions. We suggest the central bank should consider the regional differences in policy making

Suggested Citation

  • Barkhordari, Sajjad & Forughi Far, Mohsen, 2020. "The Dynamic Regional Effects of Monetary Policy on Employment in Iran (TVP-FAVAR Approach)," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 6(4), pages 109-136, February.
    • Handle: RePEc:ris:qjatoe:0173
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional differences; Factor model; Monetary policy; Monetary transmission mechanism;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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