DSGE Model Development in Iran for Increasing the Country's Financial Resilience by Minimizing the Effects of Systematic Shocks Overflow

Abstract

Iran's Islamic financial system, as one of the main sectors influenced by the overflow of systemic shocks of Iran's economy based on current institutional arrangements, has been considered in this study in the form of a random dynamic general equilibrium model. By setting the real exchange rate as a sufficient statistic, this research examines the method of increasing the resilience of the economy based on Sections 8 and 9 of the General Policy of the Resistance Economy. During the implementation of the model, the weaknesses of the applied methods in this area are investigated from linear and stationary non-accidental states aspects. According to the results, the global method with static random status has the maximum capacity to optimize the maximum resistance point.

Keywords

• random dynamic general equilibrium
• exchange rate regimes
• real exchange rate
• systemic crises
• economic resistance
• uncertainty shocks