Agent-based Modeling and Exchange rate policy After the shock of sanctions; Case study: Iran after the withdrawal of the United States from the JCPOA

اقتصاد پولی مالی

Volume 31, Issue 2 - Serial Number 28, September 2025

Document Type: Original Article

DOI: 10.22067/mfe.2024.89224.1440

Authors

hasan hasankhani^{* 1}; Nasser Elahi²

¹vatandoost k4p9t2

²Economics Department Of Mofid University, Qom, Iran.

Abstract

With the expansion of computational and simulation capacities, factor-based models have also found a special place in the economics literature. Unlike theoretical models that mainly focus on maintaining theoretical frameworks, these models have the ability to explain the behavior of economic agents without considering the representative agent assumption and other cumbersome assumptions far from reality. In this article, while describing the economic conditions after the sanctions shock, with the agent-based modeling method to simulate and evaluate the behavior of the economic factors effective in the currency structure of Iran after the sanctions shock caused by the withdrawal of the United States from the JCPOA NetLogo software has been paid. Considering that at least three exchange rates are created after the shock of the sanctions, the results show that there are at least four policy bottlenecks in front of the currency policymaker in this situation: a) the amount of reserves of the central bank b) the volume of activities Speculative c) The gap between the policy rate and the unofficial market rate of the currency d) The length of time period of the adjustment of the policy rate of the currency by the central bank. The lower the amount of foreign currency and gold reserves available to the central bank, the more speculative activities, the greater the gap between the policy rate and the informal market rate of the currency, and the shorter the period of adjustment of the policy rate by the central bank, the jumps The exchange rate and currency fluctuations will be more severe, so that the central bank may lose all its capacity and foreign reserves as a result of interventions, and with the complete inactivity of this bank, the sanctioned country will leave the stability of the currency system and falls into the abyss of currency crisis.

Keywords

Central Bank; Sanction; Exchange rate volatility; Exchange rate policy; Agent Based Modeling

References