Analyzing the Relationship among Government, Central Bank and Speculators in Iran: Approach of Game Theory and Nash Equilibrium

The experience of recent years has shown monetary policies have caused economic fluctuations rather than affect real economy because of administrative interest rate, issuing bonds and increasing their returns. These actions not only have increase the cost of government borrowing, but also increasing the minimum rates of absorbing capital in other markets and finally increased the general level of prices as well. In such situation, study about the relationship between fiscal and monetary authorities and speculators to achieving economic goals is important.therefore, in this paper,the relationship between three players, including government, central bank and speculators, has been analyzed using game theory according to Nash approaches in Iran, during (1384- 1388). For this purpose, a loss function (objective function) is defined for each player and via them the social loss is calculated. For obtaining quantitative results GAMS and MAPLE software have been used. Based on the results, the minimum of social loss along with improving speculators welfare (less loss) is obtained through central bank independence from the government.