Document Type : Original Article
Authors
1
PhD Student, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
2
Associate Professor, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
3
Assistant Professor, Department of Economics, Faculty of Management and Economics, Science and Research Branch, Islamic Azad University, Tehran, Iran
10.22034/oajre.2025.559904.1166
Abstract
In recent years, the escalating emissions of greenhouse gases and global warming have significantly exacerbated air pollution both globally and within Iran. Consequently, numerous countries have implemented various policies aimed at curbing air pollution. The present study seeks to comparatively evaluate the effectiveness of monetary and environmental policies in mitigating air pollution, employing Dynamic Stochastic General Equilibrium (DSGE) models. Methodologically, this research is applied in purpose and descriptive in terms of data collection. The population under investigation encompasses the Iranian economy and its associated macroeconomic variables. According to the estimation results derived from the DSGE model, a monetary policy shock initially reduces economic growth and consumption, subsequently leading to an increase in both variables. Investment initially rises following a monetary policy shock but later declines. Regarding air pollution, a monetary policy shock increases pollution levels for up to six time periods, after which pollution gradually diminishes. Conversely, an environmental policy shock initially stimulates consumption and economic growth but ultimately results in their decline. Moreover, investment decreases in response to environmental policy shocks. Crucially, only environmental policies demonstrate a consistent capacity to reduce air pollution.
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