Working Papers:

"Sticky Rent Prices, House Prices, and Monetary Policy in the Business Cycle", (JMP)

Presented at ACEA 2023, CIREQ 2024, CEA 2024


Real rent prices and real house prices exhibit distinct behavior in Canada compared to the United States, especially during the economic downturns of the early 1980s and 1990s, raising the question of whether greater rent price stickiness in Canada is the primary explanation. In this paper, by estimating a VAR model for the period from 1981Q1 to 2021Q4, we initially show that, unlike the United States, there is a negative correlation between rent prices and house prices in Canada when a contractionary monetary policy is implemented. Subsequently, we introduce a Three-Agent New Keynesian DSGE model that incorporates the rental market with rent price rigidity, providing a theoretical framework connecting the rental and housing markets. Additionally, we examine the effect of a tightening monetary policy on both rent prices and house prices, as well as other aggregate macroeconomic variables, while varying the degrees of rent price stickiness.

The results show that the presence of rent price rigidity is essential to explain the empirical outcomes obtained from the VAR model. Moreover, rent price rigidity results in negative correlation between house prices and rent prices during periods of economic downturns following a contractionary monetary policy. The findings also confirm that the overall inflation rate reacts less to a tightening monetary policy when there is a greater level of rent price stickiness. Furthermore, a greater level of rent prices stickiness leads to a reduction in aggregate output, non-durable consumption, and consumption of housing services. 

"Rent Price Rigidity and the Fluctuations in the Housing and Rental Markets:  A Bayesian DSGE Approach", 

Presented at CEA 2023 and  ACEA 2022


The persistent increase in house prices, coupled with relatively stable rent prices over the last few decades, has resulted in a substantial increase in the gap between housing and rental costs in Canada compared with other G7 countries. This disconnect between house prices and rent prices can be explained by the presence of greater rent rigidity in Canada. Rent rigidity distorts rent prices and it affects the demand and the supply for housing services within the rental market. Consequently, it can leave impacts on the other macroeconomic variables such as house price, consumption, and output. 

In this paper, the effect of stickiness in Canada's rental market during the period 1981Q1 to 2019Q4 is studied by using a Bayesian method to  estimate a New Keynesian DSGE model. To analyze the dynamics observed in Canada's rental market, a new type of household, known as Renters, is introduced to the familiar Borrower-Saver model. Additionally, the model incorporates rental agencies to account for the rent rigidity within the rental market.

The results indicate that a higher degree of rent price stickiness impacts both housing and rent prices, potentially constraining or magnifying the responses of output and consumption to the considered structural shocks. Moreover, the variance decomposition analysis shows that the set of structural and policy-related shocks  affect the housing and rental markets differently: Shocks related to the consumption sector can explain 40% of dynamics in rent prices, while the intertemporal preference shocks is the main driver of house prices.

"The Role of Non-Fundamental Factors in Canada's regional Housing Markets",


The persistent rise in house prices over the last decades across Canada raises the question about the role of nun-fundamental factors and the presence of speculative behaviour in the regional housing markets. In this paper, the dynamic Gordon growth model that includes discounted expected housing premia, expected real interest rates, expected rental income growth, and the non-fundamental factors term that includes rational bubbles is employed, in order to find the driving sources of housing markets and the presence of the explosive behaviour in regional housing markets across Canada over 1990Q1-2022Q4 period. The results support the existence of housing bubbles during the financial crisis in all provinces, except Prince Edward Island and New Brunswick, over the considered period. 

Moreover, the results suggest that variations in the non-fundamental factors term play a pivotal role as the primary drivers of the observed variability in the rent-price ratio. Notably, a positive covariance emerges between the non-fundamental factors term and expected housing premia, indicating their coexistence. Conversely, the negative covariance between the non-fundamental factors term and rental income growth rates highlights that larger non-fundamental terms correspond to lower expected rental income growth rates. Moreover, the results reveal nearly similar outcomes for the SADF and GSADF tests applied to the non-fundamental factors term, as compared to those obtained for the rent-price ratios.

 Peer Reviewed Publications:

"COVID-19 and gender disparities: Labour market outcomes" (with Vikkram Singh and Jessica Turetken) , 2022, Research in Economics, volume 76, issue 3, pp. 206-217.


The study explores the effect of COVID-19 on labour market outcomes for women in the major urban areas in Canada. Using data from the Labour Force Statistics, we find the pandemic has had a disproportionately negative impact on the employment and income of women, worsening gender inequalities. Sectors more likely to employ women faced immense negative pressures, leading to dismal employment numbers. The effects of continued lockdowns and future potential inflation suggest that gender wage disparity continues to increase, worsening the economic health of women and making them even more vulnerable to future event risks.

"The COVID-19 Era—Influencers of Uneven Sector Performance: A Canadian Perspective" (with Vikkram Singh and Jessica Turetken) , 2022, Economies, volume 10, issue 2, 40.


The study estimates the impact of COVID-19 on the labour market outcomes of major industrial sectors in Toronto, the largest urban centre in Canada. Using various economic data, we classify the sectors as distressed, stable, and those requiring ongoing monitoring. Furthermore, we estimate the expected impact of the pandemic shock using the Impulse Response Function (IRF) method. The results show an uneven impact of the pandemic with adverse outcomes for low-paying front-facing sectors, such as accommodation & food services and manufacturing. The post-pandemic projections show lingering negative implications for various sectors. The insights are helpful for policy recommendations, such as targeted responses to address the declines and structural changes in these sectors because of increasing technology adoption and the resulting labour market challenges.

"Dynamics of financial crises in the world trade network" (with Marziyeh Askari  and Keivan Aghababaei Samani) , 2018, Physica A: Statistical Mechanics and its Applications, volume 501,  pp. 164-169.


A simple dynamical model is introduced to simulate the spreading of financial crises in the world trade network. In this model a directed network is constructed in which a weighted and directed link indicates the export value between two countries. The weights are subject to the change by a simple dynamical rule. The process begins with a crisis, i.e. a sudden decrease in the export value of a certain country and spreads throughout the whole network. We compare our results with the real values corresponding to the global financial crisis of 2008 and show that the results of our model are in good agreement with reality.

"The Effect of Economic Sanctions on Iran's Export" (with Karim Azarbaiejani and Morteza Sameti) , 2016, Iranian Economic Review, volume 1,  pp. 111-124.


Since the Islamic Revolution of 1979, Iran has been affected by economic sanctions imposed by Western countries, especially the U.S. Since 2006 and with the development of the Iranian nuclear conflict, the United Nations has frequently imposed economic and financial sanctions against Iran. As a result of these international restrictions and their administration by an international organization, iran's exports has been heavily influenced. This study seeks to address the question whether the economic sanctions imposed against Iran’s exports have been effective. And if yes, and if yes, to what extent this effectiveness, is. Due to the fact that the sanctions imposed on Iran have been at first less economic and they have intensified over time, the effect of the sanctions in the three years of 2012, 2013, and 2014 have been examined by the fixed-effects Gravity model extracted from the model of Anderson and van Wincoop. In addition, all the trade relations and models considered have been estimated through the PPML method to estimate the unbiased coefficients in order to use all the data and to avoid the problem of zeros. Based on our results, the sanctions imposed against Iran have had a significant and negative effect on the amount of export in Iran to all its trading partners considered in all the given years. The examination of the coefficients during the years 2012, 2013, and 2014 show that Iran's value of export has fallen annually by 33 percent in average and the total loss for these three years has been 104 billion dollars. 

"The Effect of Corruption on Trade Volume of Selected Countries in the Middle East and Latin America (2002-2008)" (with Reza Akbarian) , 2012, Quarterly Journal of Quantitative Economics, volume 8, issue 4  pp. 29-46.


Some of the economists believe that current volume of international trade is less than the volume that has been predicted by the conventional trade theories. Unobserved barriers (i.e. Corruption) are one of the factors that can reduce the volume of trade from the amount that has been predicted by these conventional theories. This research has studied the role of corruption in the trade volume of selected countries in the Middle East and Latin America. In this study we have used an augmented gravity model of trade and panel data. In addition for estimating the model, we have used fixed effects vector decomposition method. The results showed that the trade is inverted-U shape function of corruption and the little amount of corruption in both regions initially helps the amount of trade to increase but when it reaches the threshold, the volume of the trade reduces in the studied countries. In addition, the results indicated that the existence of corruption in the importing country has a negative effect on the trade volume of the studied countries and it can reduce the amount of the bilateral trade.