Analysis of Short-Run and Long-Run Effects of Monetary Shocks on the Production and Employment of the Basic Metals Industry in Iran: A Non-Linear ARDL Approach

The basic metals industry is one of the most important national production industries, which includes approximately 20 percent of the industrial productions as well as 13 percent of the employment in Iran's industry. The purpose of this paper is to investigate the short-run and long-run and asymmetric effects of positive and negative monetary shocks through monetary policy transmission channels that including exchange rates, lending and credit and interest rates on the production and employment of this industry, which evaluated by non-linear Auto Regressive Distribution Lag (NARDL) model, seasonally since 1376 to 1397. The effects of monetary shocks are classified in to two groups: positive and negative shocks by using Hodrick-Prescott filter. The outputs indicate that the monetary shocks are more effective on the production of basic metals industry than its employment in a long- run. Also effects of negative monetary shocks on the employment in this industry are more considerable than positive shocks during a short-run. In the end, the asymmetric effect of monetary shocks on the production of this industry is confirmed.