One way of solving welfare loss asymmetric information in insurance is to design INFORMATIONALLY CONSISTENT CONTRACTS. When the CONTRACTS are not INFORMATIONALLY CONSISTENT, adverse selection cause the portfolio insurance to be risky, and consequently the probability of accident and loss will be high. In this paper we investigate Iran's insurance companies, based on informaionlly CONSISTENT CONTRACTS and Jonh Raily (2001) paper. We find that there are some signals that show Iran automobile collusion CONTRACTS are not INFORMATIONALLY CONSISTENT.

The existence of asymmetric information leads to adverse selection. In the last decade alternative theories had been theories had been developed to prevent it in markets especially insurance markets. According to these theories insurers can categorize their customers using insurance market signaling to avoid adverse selection externalities such as cross-subsidizing among customers with different risk levels.The present study utilizes connected data and testing the signaling and cross subsidizing hypothesis in the IACIM (Iranian Automobile Collision Insurance Market). The results show that the hypothesis of the existence of signaling mechanism in automobile collision insurance market could not be rejected but the hypothesis of the existence of cross-subsidizing customers with different risk levels on the criterion of deductible premium level was rejected.

In recent years, stock flow CONSISTENT models (SFC) have been receiving considerable attention from economists, especially Post-Keynesian economists. In recent years SFC models’ capability in prediction of economic crisis in 2008 along with the publication of a book entitled Monetary Economics, by Wynne Godley and Marc Lavoie turned a new light on the importance of these models. These models use accounting approach for economic modeling and provides a framework for treating the financial and the real sides of the economy in an integrated way and predict endogenous shocks. Moreover, to describe the behavior of economic agents, SFC models take the advantage of behavioral equation. The purpose of this study is to explain the fundamentals of SFC models and to employ them for assessment of monetary and fiscal policy. Considering the fact that the SFC models can be developed using distinctive approaches, we structured a SFC model employing Neoclassic and Post-Keynesian and calculating steady state, to analyze the impact of monetary and fiscal policy within the framework of the developed model.