عنوان مقاله [English]
The purpose of this paper is to identify an appropriate policy making framework in order to achieve the objectives of monetary and fiscal policies to stabilize the Iran economy. The behavior of monetary and fiscal policy makers was extracted by using the dynamic optimization method and game theory and objective functions definition and constrains facing policy makers under two policymaking approaches: discretion and commitment. Estimation of model parameters was done in 4 scenarios using Bayesian estimation method.
Findings show that, committed monetary leadership led to an increase in economic stability. Output and inflation stabilization is more importance for committed policy makers than discretionary policy makers. While for a committed policy maker the inflation stabilization is more importance than output stabilization. For a discretionary policy maker, the output stabilization is more important than inflation stabilization. The results of research show that for committed central bank, the stabilization of public debt is more importance than for discretionary central bank. The fiscal policy in discretionary policy making approach have pro- cyclical behavior.