Surveying Degree of Fiscal Dominance in Iran's Economy in a General Equilibrium Dynamic Stochastic Model

One of the problems in developing countries is unpleasant nexus between fiscal and monetary policies. Some of the economists believe that the main reason for inflation in such economies is monetaricizing of Government debt such as bounds. In this article it is tried to estimate the Degree of Fiscal Dominance in Iran’s economy using General Equilibrium Dynamic Stochastic Model based on Bayesian approach. Our result reaches to 77 percent for fiscal dominance which shows a low degree of central bank independence. At the end the usefulness of the obtained results are examined using some indices.