This paper attempts to compare a Markov-Switching Dynamic Stochastic General Equilibrium (MS-DSGE) model by including deep habits consumption to a MS-DSGE model without deep habits. It is concluded that the deep habit adjusted model with regime switching is able to fit the Iranian data better. The results of estimating parameters indicate that deep habit formation, together with the persistence of habit stock, are significant parameters. The results also confirm that current and future consumption demand, expected marginal cost and stock of habits are effective driving forces in extracted New Keynesian Philips Curve considering deep habits. However, in contrast with Ravn et al (2006, 2010) findings, it is shown that presence of deep habit consumption in the model for Iranian economy, cannot lead to reduce inflation in response to monetary shock while the amount of increase in inflation in response to monetary shock in the model with deep habit is less than inflation increase in model without deep habits. Furthermore, in response to fiscal shock in the model considering deep habits, the negative effect of wealth could not be compensated in Iranian economy. Therefore, consumption begins to decrease in response to fiscal shock, although these reduction in the model without deep habits takes more longer than in the model with deep habits.

Objective: The COVID-19 pandemic severely contracted Iran's economy in 2019-2021. Mass vaccinations in Iran, which began in February 2021, gradually made expectations for the future optimistic and increased investment incentives. Considering the importance of this issue, the main goal of the present study is to understand the effect of shock to the marginal efficiency of investment on Iran's economy. Also, considering that since the great recession of 2007, the macroeconomic effects of government expenditures shocks have received more attention, one of the other goals of this study is to investigate the effects of government expenditures shocks and the crowding out effect in Iran's economy. In other words, since the scientific analysis of the effect of economic shocks on economic conditions is essential, the main goal of this article is to understand the effects of shocks on the marginal efficiency of investment and government expenditures on the dynamics of macroeconomic variables in Iran.Method: Dynamic Stochastic General Equilibrium (DSGE) modeling is a branch of macroeconomics that follows the principles of microeconomics and can optimally evaluate the performance of the economy in a stochastic environment. These models are a new version of general equilibrium that emerged following Lucas' criticism. Compared to the models based on time series, DSGE models can show detailed interactions between market decision makers in the framework of general equilibrium. On the other hand, most time series models are not based on economic theory and unlike DSGE models, they are not based on mathematical optimization. Also, unlike calculable general equilibrium models, DSGE models are in a stochastic environment, and since the duration of the shock and its effect on the economy is not known, it is more appropriate to use DSGE models. Considering that the shocks on the economy are stochastic, dynamic stochastic general equilibrium models can best evaluate the effects of these shocks. In this article, a dynamic stochastic general equilibrium model is presented and estimated using the Bayesian approach and seasonal data in the period of 2001:3-2021:3. The primary core of the current research is designed based on the study of Rohe (2012) and by expanding this model, the effect of shock to the marginal efficiency of investment on the dynamics of the macroeconomic variables of Iran has been investigated. In this regard, the studied DSGE model includes households with an unlimited planning horizon, a representative firm producing a homogeneous final product in a perfectly competitive environment, the government, and the oil sector. In order to estimate model indices, Bayesian method and Random Walk Metropolis-Hastings algorithm were used. The data of the observable variables of the model include seasonally adjusted data of Gross Domestic Production (GDP), private consumption, investment and government expenditure; which have been detrended using the Hodrick-Prescott filter.Results: The results indicate that the productivity shock caused an increase in the marginal efficiency of investment and production, and subsequently the hours of employment and investment increased; This caused the interest rate to increase. Due to the increase in household income, consumption increased. The response of the variables to productivity shocks and marginal efficiency of investment are very similar. The only difference is the response of consumption to the shock of the marginal efficiency of investment. As a result of this shock, consumption decreased due to the decrease in wage rates and household income. Also, the dependence of marginal efficiency of investment shocks and government expenditures led to an increase in government expenditures as a result of the marginal efficiency of investment shock. The shock of increasing government expenditures caused an increase in the real interest rate and a decrease in investment. Also, production and employment increased in response to this shock. Due to the significant decrease in the wage rate, consumption has decreased. Since the increase in government expenditures has led to a decrease in investment, the crowding out effect in Iran's economy is confirmed.Conclusion: Comparing the effects of shock to the marginal efficiency of investment and government spending shock on the dynamics of macroeconomic variables in Iran indicates that both shocks lead to an increase in output; but the government expenditures shock has led to the shrinking of the private sector in Iran. As a policy recommendation, it is suggested that the government should manage the political and economic environment of the country in a way so that the expectations of economic agents are formed as optimistically as possible. Also, considering the confirmation of the crowding out effect in Iran's economy, the government should prioritize the goal of reducing its size and expenses.

In this paper I have been calculated the optimum rate of money growth in New Keynesian DSGE framework for Iran Economy. The presented model includes three economic agents: a government, i households and j firms. Households and firms have monopolistic power of labor and good supply, this facilitates the specification of Nominal and real rigidities and these are specified subject to Rotenberg quadratic adjustment cost function. Simulation results demonstrate that Friedman's Rule is not supported in Iran economy, and in this framework the optimum seasonal rate of inflation and money growth is %2 and %3.003 respectively.

This paper develops a New Keynesian dynamic stochastic general equilibrium (DSDE) model to study Iran's economy. The model considers the dependence of Iran's economy to oil exports. Oil sector and oil export revenues have been modeled as a separate sector and one of the government budget resources, respectively. Like in other New Keynesian DSGE models, firms face nominal rigidities with monopolistically competitive intermediate-good sector. Four shocks (productivity, oil revenues, money growth rate and government expenditure) have been introduced as the sources of volatility. The findings show that business cycle moments generated by the model and those of actual statistics from the economy are closely related. The model produces more volatile private investment and less volatile private consumption than non-oil output. Impulse response functions of shocks show that non-oil output increases in response to productivity, oil revenues, money growth rate and government expenditure shocks. Although non-oil output increases in response to government expenditures shocks, crowding- out effect of these expenditures cause output to decrease after some periods.

A Dynamic Stochastic General Equilibrium (DSGE) Model is developed to study monetary business cycles impacts of volatilities of oil revenue and money supply on macroeconomic variables in Iran. The results show that 0.15 percent deviation from the trend of steady state inflation is explained by changes in oil revenue when it is accompanied by change in money aggregates. However, if such changes in oil revenues are not financed by the central bank, inflation deviates only by 0.1 percent. The results reemphasize the fact that money is neutral in a non-sticky price framework and only affect output and employment by 0.05 and -0.01 percent respectively.

This study tries to examine the way housing residential investment in Iran's urban area is influenced by the shocks of oil revenues, and for that, time series data spanning the period 1991:1-2007:4 are deployed in a Dynamic Stochastic General Equilibrium (DSGE) model including households, firms producing new residential houses, and the production of other economic firms as well as oil sector. The model is based on some simplify assumptions suitable to Iran's economy characteristics as: Iran as a small economy regarding capital flows, Oil Exports and goods imports and no price stickiness in housing sector. Moreover, the allocation of resources in the economy is determined by a central planning. The Model's solution and simulation is processed through using DYNARE as a subset of MATLAB software package. The results showed that the incidence of extreme volatility in the short behavior of housing residential investment in Iran's urban area, due to shocks of oil revenues, shocks was not Persistent and quickly disappeared. This implies that Iran's economy is suffering from Dutch Disease.