The purpose of this paper is to define and calculate Iran's Monetary and Financial Sector resilience index. So, according to the existing resilience literature, and using the grounded theory (GT) approach, theoretical saturation was obtained with respect to the resilience components of the Monetary and Financial Sector and Indicator factors were extracted using the bayesian model averaging approach. Five variables were identified in the presence of 22 variables, in the framework of the model's uncertainty and with an estimated three million and six hundred thousand regressions; which include the growth rate of government oil revenues, the fluctuation of the growth rate of liquidity, Risk index, the ratio of bank debt to the central bank to the Monetary base and the ratio of government debt to the banking system to liquidity, as non-fragile variables, (this means that it retains its work as an effective factor in the resilience of the Monetary and Financial Sector in the presence of other variables and have meaning). Which shows that because of the probability of a higher uptake, these variables should be considered more than other variables in assessing the effect of Monetary and Financial Sector. The time series of the index of Monetary and Financial Sector resilience is calculated based on the normalized variables of these variables for the period from 1976 to 2016.

The current set up of Iranian banking system is the continuation of previous structure and nothing has changed in the banking organization after the passage and implementation of law of interest free banking operations. The changes introduced in the arrangements of banks after the enactment of the Law, were confined to the nationalization and merger of these banks. While non-interest banking operation is essentially different from interest based banking system, the lack of an appropriate structure has caused Iran's banking system to remain far from an interest free and efficient system. The low share of banks direct investment, noncontingent return, the incompatibility of intermediation with principle-agent method, lack of commitment to the nature of contracts, inverse selection, and moral hazards are the major implications of Iranian banking system remaining unchanged. The research aims at presenting a model for restructuring the Iranian banking system- in conformity with interest free Financial system. To keep the intermediatory nature of bank, its dual legal entity, and Monetary and capital Sectors, as it is the case in conventional banking operations, Iranian banks' should only act as Financial intermediators and hand over the investment and agent tasks to appropriate institutions. Thus, the current banking system must undergo three changes. First, bank operations should be limited to handling current accounts, beneficiary loan deposits and other common banking services. Secondly, banks should not accept time investment deposits, this task will be handed over gradually to the related institutions. Thirdly, specialized banks should be transformed into commercial investment banks. In this model, the interest will be eliminated and the specialization of Financial institutes will help decrease the informational asymmetry. As a result, direct investment will increase and the economic growth will accelerate.

The present study investigated the effectiveness of Monetary policy and its consequences for Financially included and excluded households using a calibrated new Keynesian dynamic stochastic general equilibrium (DSGE) for Iran. The impulse response function analysis suggests that although a significant part of the population is Financially excluded (about 45%), the contractionary Monetary policy shock significantly reduces inflation and GDP. In addition, a contractionary Monetary policy decreases the consumption of Financially excluded households more than that of Financially included households, because Financially included households can absorb this shock due to access to Financial instruments (services) and can, therefore, smooth their consumption more effectively than Financially excluded households. The comparison of the results obtained from our model with the full Financial inclusion model suggests that expansionary Monetary policy in full Financial inclusion leads to higher output growth with lower inflation costs. Therefore, efforts to ensure full Financial inclusion are recommended so that Monetary policy can fully achieve its goals.

The global Financial crisis in 2007 showed that Financial variables from different channels could exacerbate business cycle fluctuations. From the perspective of modeling in the economy, the models that assumed Financial markets without friction lost their credibility. Accordingly, the correct response of the Monetary authorities to the Financial cycles has become one of the theoretical and political concerns. Therefore, the present study examines the effects of the central bankchr('39')s reaction to Financial cycles during the period of 1369: 1 to 1395: 4 implementing several counterfactual simulations within the framework of the New Keynesian model. The results in different scenarios indicated that the more sensitive the central bank is to the Financial cycle, the output will have less affects by Financial shocks. However, inflation will respond to the shock of the Financial Sector with more fluctuations; therefore, it seems that Monetary policy in Iran cannot reduce the effects of Financial shock on macroeconomics solely through a change in the Monetary base.

Price stability and sustainable economic growth are conventionally considered as key goals of Monetary policy. Financial stability is also recognized as the third pillar in the Monetary policy objective function after the Financial crisis of 2007. Although Financial stability “ as the third target in the Monetary policy objective functions” is evidently inconsistent with the twin conventional Monetary policy goals, it mitigates the side effects of Financial turmoil impact on the price and growth instability in the macrocosmic environment in the medium term. Financial crises, which have historically created large deviations in the Monetary policy goals, necessitate empowering the conventional policy instruments (policy interest rate, Monetary aggregate and rate of requirement ratio) with unconventional policy instruments. In this context, unconventional supplementary Monetary policy instruments streamline Monetary transmission mechanism to achieve asymmetrically triple Monetary policy goals through expanding open market operations to non-governmental bonds, facilitating banks’ overnight financing in the payment system, and initiating zero bound interest rate policy. In this research, a Dynamic Stochastic General Equilibrium Model (DSGEGertler and Karadi, 2011) is technically utilized to estimate the impact of conventional (interest rate) and unconventional (credit lines) Monetary policy instruments on the macroeconomic variables (inflation, output growth, exchange rate and stock market price index), while simulating the macroeconomic variables response to Financial instability. The simulation evaluates Monetary policy impulse response function based on optimization approach in the context of crisis scenario. Monetary policy rules basically assessed in this paper are introduced in the context of optimization and non-optimization, which include Taylor interest rate rule without Financial stability, simple optimization interest rate rule with Financial stability, and unconventional Monetary policy rule. In this context, Central banks’ line of credits as unconventional tool, which is influenced by the policy maker decisions, injects directly to banking network flow of funds. Central banks, which had sold the public bonds to the families in the form of risk-free investment in the first step, accumulate Financial resources in the balance sheet. Accumulated Financial resources lend simultaneously to the firms in the second step in the context of unconventional expansionary Monetary policy in order to increase banking network leverage ratio, which streamlines credit operations and develops private Sector investment. Presumably, central bank intervention is empirically considered inefficient compared to the private Sector in the Financial intermediaries due to CBs cost inefficiency to find and allocate to the key economic Sectors. The DSGE parameters are statistically estimated by the Bayesian approach through using time series for some macroeconomic variables including consumption, private investment, inflation, government expenditure, change in outstanding loan, commercial banks leverage ratio, and stock market return. Given the fact that the Bayesian estimation is technically required to introduce the distribution of parameters as priors, priors are determined through numerical analysis as well as through previous research. The estimation log data density mounted at about 399 and the robustness of estimated parameters has been verified based on test of Brooks and Gelman (1988). In this study, rapid reduction in the quality of capital is considered Financial crises shock indicator which influence key macroeconomic variables. Simulation results indicate that unconventional Monetary policy affects efficiently real Sector sustainability while mitigating Financial instability (assets market) in the macroeconomic environment. In this regard, Financial stability is evidently accompanied by the lower nominal interest rate and inflation in line with Gertler and Karadi (2011). In other words, although unconventional rather than conventional Monetary policy instruments were limitedly utilized amid Financial turmoil in Iranian economy, they create sustainable growth along with lower interest rate and inflation in the medium term accompanied by higher household welfare. Utilization of unconventional Monetary policy instruments diversifies policy tools and reduces the deviation of conventional policy instruments and target variables (price, output growth and Financial stability) in the Iran macroeconomic environment.

his study aims to present a comprehensive model for analyzing industrial investment in the housing Sector from 2005-2023. The proposed model, developed using system dynamics methodology, incorporates a range of economic factors, including Monetary variables (such as inflation, interest rates, and exchange rate fluctuations) and non-Monetary variables (such as population growth, urbanization, and migration), along with fiscal, regulatory, and technological policies. The model employs reinforcing and balancing loops to examine the complex interactions among these variables. The results indicate that exchange rate fluctuations and inflation are major deterrents to investment. At the same time, government Financial support and the adoption of advanced technologies can enhance productivity and help balance supply and demand. Furthermore, technological advancements play a critical role in reducing construction costs and accelerating project completion. The innovation of this study lies in the development of a dynamic model capable of simulating the long-term behavior of key variables and providing actionable solutions to reduce market volatility and improve sustainability in the housing Sector. The findings offer valuable insights for policymakers and planners in making informed decisions to manage investment in the housing industry effectively.