Open AccessThe Dynamic Effect of Micro-Structural Shocks on Private Investment Behavior
Publication year - 2021
Publication title -
acta montanistica slovaca
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.472
H-Index - 21
eISSN - 1339-3103
pISSN - 1335-1788
DOI - 10.46544/ams.v26i1.01
Subject(s) - investment (military) , dynamic stochastic general equilibrium , boom , economics , shock (circulatory) , inflation (cosmology) , markup language , technology shock , econometrics , structural estimation , monetary economics , capital (architecture) , macroeconomics , monetary policy , engineering , computer science , environmental engineering , law , history , archaeology , theoretical physics , operating system , political science , xml , medicine , physics , politics
This paper estimates the dynamic effect of three micro-structural shocks, namely, investment-specific technology, markup and technology shocks to key components of the Iranian economy: private investment behaviour. The identification strategy positions the structural shocks to private investment behaviour in the Dynamics Stochastic General Equilibrium (DSGE) framework with a three-accuracy test estimation: The Brooks and Gelman test, the Metropolis-Hastings jumping distribution acceptance ratio, and the distribution of the deep posteriors parameters are asymptotically normal. The quarter economic data of Iran economy from July 1988 until March 2015 is applied. The findings illustrate that the structural shocks about technology have a similar impact and cause a growth in private investment, and the only difference is, in investment-specific technology shock due to a temporary decrease in the capital expenses installation (Tobin's Q), an investment boom is driven. In contrast, the price markup shock due to inflation causes a decline in all investment indices.