The Effect of News Shock on Consumption in the Iranian Economy: A Dynamic Stochastic General Equilibrium Approach

Document Type : Research Paper

Authors

1 Assistant Professor of Agricultural Economics, Sari Agricultural Sciences and Natural Resources University, Sari, Iran.

2 Associate Professor, Agricultural Economics, Sari Agricultural Sciences and Natural Resources University, Sari, Iran.

3 Professor, University of Mazandaran, Babolsar, Iran.

Abstract

Introduction: The gap between the price received by the producer and the price paid by the consumer is referred to as the marketing margin. How decision-makers, consumers and supply chain brokers make decisions is affected by various shocks.
Materials and Methods: In this study, a stochastic dynamic general equilibrium model and impact-response functions were used to investigate shocks during the period 1974-2014.
Findings: The results showed that the shock of good news and technology leads to a positive deviation in production and a negative deviation in the marketing margin of the agricultural sector. Also, price fluctuations due to news and technology shocks in the Iranian economy move in line with the cycle of recession and prosperity. Thus, news and technology shocks play an important role in the fluctuations of important economic variables. Also, the impact of the media on the marketing margin of the agricultural sector, the importance of news and transparency in the economic environment should be considered by policy makers.
Conclusion: news shock in general leads to a negative deviation in the marketing margin and the marketing margin of the agricultural sector in particular. Also, price fluctuations due to technological shocks in the Iranian economy move in line with the cycle of recession and news boom, because the emergence of technological shocks leads to a positive deviation of production.

Keywords

References

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Agricultural Economics Research
Volume 13, Issue 4
February 2022
Pages 134-148

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History

  • Receive Date: 19 January 2020
  • Revise Date: 12 March 2020
  • Accept Date: 11 October 2021

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