Comparison of the Effects of Exogenous Impulses on Iran's Business Cycle under Environmental Policies

Articles in Press

Document Type : Research Paper

Authors

1 Ph.D. Student in Economics, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

2 Professor in Economics Department, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

3 Associate Professor in Economics Department,, Faculty of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

10.22034/ecoj.2025.62752.3334

Abstract

Environmental protection as one of the Millennium development goals requires the intervention of policymakers and the implementation of environmental policies in order to limit the emission of greenhouse gases. In this research, the consequences of implementing environmental policies on economic variables (including consumption, production and investment) in Iran's economy for the period of 1978-2017 are investigated. For this purpose, the Dynamic Stochastic General Equilibrium (DSGE) method was used to analyze a closed economy model with the approach of real business cycles. The source of fluctuations in the economy is the momentum of the total productivity of production factors and the momentum of energy prices. Also, the capital is not fully used in the production process. The simulation results show: 1. During the positive momentum of productivity, the emission cap policy has the best performance in terms of reducing the fluctuations of economic variables and reducing greenhouse gas emissions. 2. During the positive momentum of energy prices, the emission cap policy and the emission intensity target policy show the best performance in terms of the level and fluctuation of economic variables and pollution emissions.

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Quarterly Journal of Applied Theories of Economics

Articles in Press, Accepted Manuscript
Available Online from 18 January 2025

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