Dawood Yousofzai , Adela Rahmati
Monetary policy is a combination of the rules and actions that the central bank
performs to achieve its goals. In many countries, the primary goal of monetary
policy is price stability. However, some central banks also pursue other goals such
as achieving full employment, maintaining domestic financial stability and
instability in the balance of external payments. The purpose of this study is to
investigate the effect of monetary policy channels on economic variables with the
systemic dynamics approach, which, using causal-loops, simply explained the
relations between variables and showed that monetary policy, at least in short term
the real variables influences the economy, so policy makers must carefully apply
monetary policy to control the volume of money and production in the country.