A DSGE Model for Food Price Dynamics and Subsidy Policies in Iran: Bayesian Estimation and Policy Analysis

This paper develops a Dynamic Stochastic General Equilibrium (DSGE) model tailored to the Iranian economy, with particular emphasis on food price dynamics, government subsidy policies, and monetary policy interactions. Given Iran's unique economic structure- characterized by substantial oil revenues, large-scale food subsidies, and significant agricultural and non-agricultural sectoral divisions-we construct a dual-sector model that captures these institutional features. Using Bayesian estimation techniques and Iranian macroeconomic data from ۱۹۹ to Y., we analyze the transmission mechanisms of various shocks including productivity, oil revenue, monetary policy, and subsidy shocks. The model incorporates habit persistence in consumption, Calvo price stickiness, and a Taylor rule that responds to both headline and food inflation. Our findings reveal that food subsidy policies effectively stabilize consumer prices but impose significant fiscal burdens, particularly when oil revenues decline. We demonstrate that coordinated monetary and fiscal policies can achieve better macroeconomic outcomes, and we provide impulse response analysis showing the dynamic effects of policy interventions. The model offers valuable insights for policymakers addressing food security, inflation management, and fiscal sustainability in resource-dependent emerging economies.

کلیدواژه ها:

DSGE Model ، Iranian Economy ، Food Subsidies ، Monetary Policy ، Bayesian Estimation ، Oil Revenues ، Dual-Sector Economy ، Food Inflation