Asymmetric effects of monetary shocks on the value added in industry sector in iran

As one of the most important sectors of the country’s economy, industrial sector is noteworthy in terms of having extensive capabilities, capacities, and effect on macroeconomic variables. In this study, through the extraction of positive and negative monetary shocks using Hodrick-Prescott filtering method, symmetry or asymmetry; in other words, the effect of monetary shocks on the growth of industrial sector was investigated. It was found that the dummy variable of negative shock which has been used to investigate the asymmetric effects of positive and negative monetary shocks on the value added of industrial sector had a significant effect on value added of the industrial sector and showed that negative monetary shocks change the value added of the industrial sector in terms of absolute value as 0.78. On the other hand, DUIN variable significantly influence the value added of Iranian industrial sector. This means that positive and negative monetary shocks will leave asymmetric effects on the growth of Iranian industrial sector over time. Therefore, the reaction of industrial sector growth is less than negative shocks compared to positive monetary shocks. Thus, monetary policies are not appropriate policies to influence production in industrial sector. Using other policies related to products of this sector is necessary to influence it.

Keywords:

Industrial Sector , Monetary Shocks , Hodrick-Prescott Filter