The Asymmetric Effects of Monetary Policy Shocks on the Residential Market of Iran:A DSGE Approach

The aim of this study is analyzing the asymmetric effects of monetary policy shocks on the residential market of Iran. In so doing, a Dynamic Stochastic General Equilibrium (DSGE), based on the residential sector of Iran is designed. Moreover, the data used are quarterly in period 1989-2016 and Bayesian method is employed in order to estimate Iran’s economy. The asymmetries of monetary policy shocks are indicated in the following three conditions: The positive and negative effects of monetary policy shocks, the effects of the size of shocks and the effects of monetary policy shocks in depression & inflation. By implementing a positive shock (single- unit) on the model, housing volume (h) has decreased about 45% and the relative rental price (q) has increased approximately about 13%. By increasing the relative rental price, the real income of the housing sector’s agents has augmented. By exerting a negative shock (single- unit) housing volume has been amplified 9%.  By increasing the housing construction, the relative rental price has been augmented about 1%.  But the generated net value in the residential sector showed no change at first. The results indicate by implementing a positive shock, the net value in housing sector rose by around 12%.  One the other hand, The feedback of the models’ variables vary while the size of shocks has changed, or by exerting the same monetary policy once in depression and the other time in inflation