Analysis of the Effects of Monetary financial Policy Shocks on Formation of Trade Cycles and Ineome Distribution in Iran

In this research it is dealt. with the importance of the effects of monetary and financial policy shocks on formation of trade cycle and income distribution in Iran. Annual time Series data of 1973 to 2007 and Hadrick –Prescott technique bot the analysis were employed. The results showed that trade cycles in Iran responded to both monetary and financial policies. However the effects eves more of financial shocks and less of monetary ones. The monetary effects faded out after one or two cycles Monetary shocks did not have negative effect on income distribution in Iran. However the financial shocks increased the Gini ratio and Worseneded the income distribution. Other findings show that both. Monetary and financial shocks increased inflation, that in turn increased the Gini ratio, that is worsened the income distribution.