The areas of research and the questions that I find engaging are as follows. How does the central bank policy gets transmitted through the economy? Various potential answers are provided and one possible question I consider is which factors and features in an economy determine the behavior of macro-aggregates in response to monetary policy. Among the macro-aggregate variables, I am particularly interested in the relationship between inflation and the policy interest rates; my question here is how does this relationship differ between the short- and long-run as well as among different eras? Furthermore, which variables play a critical role in the determination of this relationship? To a wider extent, I am also interested in information frictions and their effect on the agents' behaviors in an economy.
The course of my PhD at Simon Fraser University has been a precious time for my research. I also have professional research experience at the Monetary and Banking Research Institute, Central Bank of Iran where I developed invaluable hands-on experience. There I gained a deeper understanding of the economic forces playing roles in the lives of individuals and the effect of government and central bank policies on these forces. Further, I gathered effective skills during my valuable research assistant positions at Simon Fraser University. Below is a summary of my research interests and experiences.
Research Fields:
Primary. Macroeconomics, Monetary Economics
Secondary. Applied Time-series, Applied Search and Matching Theory, Experimental Economics
Work in Progress:
“Fisher vs Keynes: Does an Interest Rate Hike Cause Inflation to Increase or Decrease?” (JMP)
“Identifying the Identifying Assumptions in a Liquidity-Augmented Fisher Equation”
“Inflation and Interest Rates in the Lab”, with Lucas Herrenbrueck and Luba Petersen
Research Experience:
Researcher:
2015-2016, Monetary and Banking Research Institute, Central Bank of Iran, Tehran, Iran.
- I had several contributions and duties among which I would like to highlight two prestigious ones. I developed the fiscal sustainability Excel toolkit for the economy of Iran based on that of IMF’s for the oil-exporting countries. It is tailored to capture the specifics of Iran’ economy and its policy makers’ concerns. I also was a part of the operational team of three national scale conferences held by Monetary and Banking Research Institute during 2015-2016.
Research Assistant:
2018-2022, Supervised by Dr. Lucas Herrenbrueck. Simon Fraser University, Burnaby, Canada.
- Literature reviews, data collection, and empirical data analyses including computer coding for several Neo-Monetarist projects.
2021, Supervised by Dr. Luba Petersen. Simon Fraser University, Burnaby, Canada.
- Experimental macroeconomics; it is continuing as a coauthorship.
2018-2019, Supervised by Dr. John Knowles. Simon Fraser University, Burnaby, Canada.
- Empirical studies of the Panel Study of Income Dynamics in SAS.
2014-2015, (several short-term positions at) Parliament Research Center, Entakhab Industrial Group, Urban Development and Revitalization Organization, and Monetary and Banking Research Institute of Central Bank of Iran, Tehran, Iran.
- I contributed to a national project, “The Causes of Stagflation in Iran and the Exit Roadmap”, and the book published under the same name. A part of my role was to study the fiscal and monetary policies in Iran in the years leading to the stagflation as well as studying the stagflation episodes in the US and Venezuela to find similarities.
Academic Presentations:
Vienna Macroeconomics Workshop 2023, Vienna, Austria (accepted)
Summer Workshop on Money, Banking, Payments, and Finance, 2022, Washington, D.C., USA (poster)
4th Liquidity in Macroeconomics Workshop, 2022, Vancouver, BC, Canada
VPDE 15th PhD Workshop in Economics, 2022, Turin, Italy (accepted)
48th Meeting of the Atlantic Canada Economics Association, 2022, Halifax, NS, Canada
97th WEAI Annual Conference, 2022, Portland, OR, USA
Canadian Economics Association Conference, 2022, Ottawa, ON, Canada
17th CIREQ Ph.D. Students’ Conference, 2022, Montreal, QC, Canada
Canadian Economics Association Conference, 2019, Banff, AB, Canada
25th Annual Conference on Monetary and Exchange Rate Policies, 2015, Tehran, Iran
Non-academic Publications:
Azizirad, M., Chronological Study of Non-Performing Loans in the Economy of Iran. (2015) Tazehaye Eghtesad 149. Pages 50-54.
Azizirad, M., A Sustainable Primary Non-oil Deficit Approach to Assess Fiscal Sustainability in Iran. (2015). Policy Note, 25th Annual Conference on Monetary and Exchange Rate Policies, Tehran, Iran.
Azizirad, M., et al. Assessing the Inflationary Effects of Government Budget of 1395. (2015) Parliament Research Center. Tehran, Iran.
Azizirad, M., et al. Parliament, Government Budget, and Inflation. (2016) Parliament Research Center. Tehran, Iran.
Azizirad, M., et al. Senators and Inflation. (2016) Parliament Research Center. Tehran, Iran.
Abstracts
"Fisher vs Keynes: Does an Interest Rate Hike Cause Inflation to Increase or Decrease?" (JMP)
To answer the question of whether an interest rate hike causes inflation to increase or decrease, I start from the Neo-Classical macroeconomic model. I discuss a challenge in estimating these models due to the discrepancy between the theoretically motivated interest rates and the observed ones. To overcome this challenge, I estimate a liquidity-augmented empirical model of interest rates and inflation using two methods: a time-varying structural vector autoregression and a system of latent variables. I find that an interest rate hike has a short-run negative effect on inflation regardless of its duration. This result contrasts with the Neo-Fisherian hypothesis prediction of a positive short-run response of inflation to a permanent shift in interest rates. At the same time, inflation and the nominal interest rate move in the same direction in the long-run, although not one-for-one. I also find that the short- and long-run interactions of macroeconomic variables including inflation and the interest and growth rates have changed across eras from the 1950s to 2016. Finally, the results reinforce the importance of the liquidity premium on near-money assets in macroeconomic analyses.
"Identifying the Identifying Assumptions in a Liquidity-Augmented Fisher Equation"
A liquidity-augmented Fisher equation is empirically studied using a structural vector autoregressive model. In this paper, I find the identifying assumptions that attain the highest likelihood and are closer to the posterior estimation of the model. The results shed light on the interactions of the macro-aggregates in the US economy in the period of the Great Moderation. I find that the response of the Federal Reserve to inflation has been consistent with the Taylor principle; the growth rate has a slight negative response to the interest rate policy; and the effect of inflation on the growth rate is larger than what our conventional models predict. This last finding stems from the fact that inflation is perceived as a signal of the stance of the economy in the period of the Great Moderation and economic agents use this signal in their investment decisions.
"Inflation and Interest Rates in the Lab", with Lucas Herrenbrueck and Luba Petersen
What happens to inflation when a central bank increases interest rates? Conventional wisdom dictates that inflation should decrease at least in the short run, monetarist logic implies that inflation should depend mainly on money growth rather than interest rates, while the Neo-Fisherian hypothesis predicts that inflation increases as long as the interest rate increase is perceived as permanent. We test these competing hypotheses in an experimental monetary economy where agents make choices to produce, consume, and save via a potentially interest-bearing deposit account. We subject the deposit interest rate to permanent shocks. Early results show elements of both the conventional and the monetarist channels, but not the Neo-Fisherian one. They also show that subjects generally hold too much of liquid wealth and do not accurately forecast the effect of the interest rate change on inflation.