DSGE, Trade policy, exchange rate policy, rigidity, Export, Import, oil

Reducing the tariff rate, which has effect on domestic industries, and devaluation of domestic money, due to their multidimensional effects, are very important. The aim of this paper is investigating the effects of trade policy and exchange rate policy in Iran, in the framework of a DSGE model for the open, small and oil exporting country, on the macro economic variables especially import and export. Also, the incomplete exchange rate pass-through in the form of nominal rigidity, entered into the model. The model parameters are estimated from 1973 – 2014, with the Bayesian method. Results from on Impact impulse-response function show that the positive shock of exchange rate increases the output and employment and decreases the import. The impact of this shock on export, although is positive but due to small figure of elasticity it, is not exported to reach to sever increase in non_oil exports. Additionally, the effects of positive shock in the intermediate goods tariff rates cause reducing the import of these goods, increasing the output and employment, and in total, reduction of total imports and export. Also, the positive shock of consumer goods tariff rates cause reducing the import of these goods and total import.

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