Analyzing the mechanism of the change of the component government expenditure, under the influence of two rule-based and discretionary policies, using dynamic stochastic general equilibrium model

The purpose of this paper was analyzed and evaluated the impact of fiscal shocks on target variables . In other hand this paper studies the viewpoints of various economists and comparing regulation vs. discretion as a basis for monetary policies. For this purpose, a dynamic s dynamic stochastic general equilibrium model with a new Keynesian approach is employed to sketch an appropriate model for Iranian economy. To calculate the required coefficients, data of the period 1991-2021 and also compares the results of them. This model analyzes government spending, which divides it into the consumption of goods, services, and investment and comparing regulation vs. discretion as a basis for monetary policies. Functions of impulse response demonstrate that enhancement effects of government consumption expenditures less than government investment. finally, it is shown that the effect of the presented rules on the inflation variable is higher than the real sector variables.The important point in this research is that in addition to examining and analyzing the effects of financial policies (government consumption and capital expenditures) we have compared the effects of the aforementioned policies in the form of two different monetary policy. An another important issue that shows the importance of choosing the right policy for monetary policies is how these rules influence on economic variables in the face of incoming shocks.