A survey on the effect of interest rate increase of bank deposits on macroeconomic variables Iran

Government interference in the financial markets by interest rate ceiling determination of bank deposits, high rate of legal reserve, interference on how bank credits distribution and capital limited codification is caued to reduce the bank interest rate with level lower than inflation rate and thus is negative the real interest rate. In economic contexts, these conditions is called financial repression. The past several decades, in Iran economics, the financial system had been had many restrictions which the important restriction is interest rate determination for bouth deposits and loans bank imperative form. But based on Mackinnon and Shawۥ theory, if interest rate increase of bank deposits can be cause to increase the economic growth in Iran? In present research, it has been investigated the bank deposits interest rate increase effect in Iranۥs economics. In order to, it was used DSGE mogel. The results indicated that bank deposits interest rste increase is caused to reduce the investment, bank credits and GDP. Thus is reduced economic growth. Therefore, Mackinnon and Shaw ۥtheory is rejected in economics of Iran.