TAKE A LOOK AT INFLATION IN IRAN: VARX APPROACH

Q: How can I download an article?

To download an article from SID, first log in to the site, search for the article title, and click on the 'Download Article' option.

Q: How can I download an ISI article?

To download an ISI article on SID, enter the keyword or article title in the search bar, view the relevant results, click on the desired article, and select the 'Download Article' option.

Q: How can I access the SID database?

To access the SID database, visit SID.ir, create an account, and log in to access scientific resources.

Q: Is downloading articles from SID free?

Some articles on SID are available for free, while others require payment. Details are specified on the article's page.

ARMAN SEYED AZIZ; GHORBANNEZHAD MOJTABA; KAFILI VAHID

مرکز اطلاعات علمی Scientific Information Database (SID) - Trusted Source for Research and Academic Resources

Journal Paper

Paper Information

Journal: JOURNAL OF APPLIED ECONOMICS STUDIES IN IRAN Year:2017 | Volume:6 | Issue:22 Page(s): 99-121

Download Full-Text

Persian Verion

View:

954

Download:

Cites:

Information Journal Paper

Title

TAKE A LOOK AT INFLATION IN IRAN: VARX APPROACH

Author(s)

ARMAN SEYED AZIZ | GHORBANNEZHAD MOJTABA | KAFILI VAHID | Issue Writer Certificate

Keywords

INFLATIONQ2

MONETARY BASEQ1

VARXQ1

Abstract

High INFLATION, along with challenges such as low economic growth (compared to other countries and compared to target values in the fifth development plan), demographic shocks and high unemployment rates, especially in youth, monetary and fiscal discrepancies, exchange rate fluctuations, lack of planning Correct, policy making, government economy, unhealthy competition, widespread political rents, sanctions, budget dependency on oil, mismanagement and weakness of institutions, privatization, implementation of the second phase of targeting subsidies and lack of political stability, One of the most important challenges facing the Iranian economy. In macroeconomic variables, INFLATION seems to be the most important and chronic challenge facing the Iranian economy over the last few decades. Due to the destructive effects of INFLATION on the economy, its control as one of the goals of macroeconomic policies has always been a matter for economists. The persistent and chronic INFLATION of these days of the Iranian economy is a phenomenon whose causes have been rooted in many years. This article seeks to study the factors influencing INFLATION as the main challenge of the present Iranian economy, based on theoretical literature of macroeconomics in the field of INFLATION and the revealed facts of the Iranian economy. For this purpose, considering that at least two variables of oil exports and institutional variables are as external variables of the model, so, in this study, the specific patterns of VARX have been used. The VARX has this feature, In addition to the exogenous consideration of a variable in VAR, enables us to examine the effect of this variable's impact on other variables of the pattern using the shake reaction function. In the end, using the estimated macroeconomic model, we will predict INFLATION under different scenarios for the money base growth rate. According to the review period (1352-1944), forecasts for the three years of 2012-2013 will be based on two scenarios (the growth scenario of 30% of the MONETARY BASE and the growth scenario of 10% of the MONETARY BASE). The results showed that MONETARY BASE variables, exchange rate and oil exports have a positive effect on INFLATION. Also, the variable of economic freedom is negative, which indicates a negative relationship between prices and economic freedom. The results of the impulse response functions also showed that due to a monetary shock, exchange rate and oil exports, the level of prices would increase, but with a decreasing rate. The results of the Bootstrap method show that the above-mentioned shocks increase the level of prices and remain at the same level. Also, for the shock caused by two variables of production and economic freedom, it is also seen that the level of prices has fallen. Using estimated macroeconomic model, we predicted INFLATION under two different scenarios for liquidity. In the first scenario (the current situation), oil exports are stable at the same level in 1394, the economic freedom index is fixed at the same level in 1394 and the annual growth money base is 30%. In the second scenario, the same assumptions exist, except that the base money growth is 10% annually. According to the reviewed period (1352-1394), the predictions were made for three years, 1395-1397. The results show that the difference in INFLATION under these two scenarios will be 3.6, 7.4 and 9 percent, respectively, during the years 2012-2013. That is, controlling the growth of the MONETARY BASE can control INFLATION in part. Of course, this should not be forgotten that severe monetary contraction policies could affect economic growth.

Cites

No record.

References

No record.

Cite

APA: Copy

ARMAN, SEYED AZIZ, GHORBANNEZHAD, MOJTABA, & KAFILI, VAHID. (2017). TAKE A LOOK AT INFLATION IN IRAN: VARX APPROACH. JOURNAL OF APPLIED ECONOMICS STUDIES IN IRAN, 6(22 ), 99-121. SID. https://sid.ir/paper/226491/en

Vancouver: Copy

ARMAN SEYED AZIZ, GHORBANNEZHAD MOJTABA, KAFILI VAHID. TAKE A LOOK AT INFLATION IN IRAN: VARX APPROACH. JOURNAL OF APPLIED ECONOMICS STUDIES IN IRAN[Internet]. 2017;6(22 ):99-121. Available from: https://sid.ir/paper/226491/en

IEEE: Copy

SEYED AZIZ ARMAN, MOJTABA GHORBANNEZHAD, and VAHID KAFILI, “TAKE A LOOK AT INFLATION IN IRAN: VARX APPROACH,” JOURNAL OF APPLIED ECONOMICS STUDIES IN IRAN, vol. 6, no. 22 , pp. 99–121, 2017, [Online]. Available: https://sid.ir/paper/226491/en

Related Journal Papers