An Investigation of Asymmetric Effects of Monetary Policies on Production in Iran Economy

In the last two decades, numerous theoretical and experimental researches have been conducted to study the asymmetric effects of monetary policies on real variables. Some New Keynesian economists believe that monetary policies can produce asymmetric effects on gross domestic production. In this paper, we analyze the asymmetric effects of monetary policies on production in Iran, in the time period 1959-2008. We use non-linear smooth transition autoregressive and logistic transition function models and for estimation we use nonlinear least squares estimator and Newton- Raphson algorithm. Our results show that the non-linear model fits better than the linear model and the effects of monetary policies on gross domestic production in two cases of low and high growth rates of oil income are different. In the studied period, expansionary monetary policies under the low growth rate of oil income increased the production more than in the case of high growth rate of oil income. Also, private investment and government expenditures in low growth rate of oil income situation increased the production more than in the case of high growth rate of oil income.