<abstract xmlns="http://www.w3.org/1999/xhtml"><p>This study focuses on: (1) finding the causes of inflation which follows the inflation theories such as Demand-Pull, Cost-Push and Structural inflation.(2) measuring the degree of inflation persistence in order to evaluate the ability of monetary policies to control inflation. Engle- Granger test and the Autoregressive Distributed Lag are applied to analyze the response of inflation to its determinants. The Grid bootstrap Method and Impulse Response Functions measure the inflation persistence. The results suggest that controlling the money supply is a key factor in controlling inflation. The appreciation of Rial exchange rate is an important factor of low inflation. It is increased as a result of Budget deficit while decreased due to oil price and real GDP. Inflation persistence follows the structural changes and finally permanent shocks die out after some horizons. Therefore, monetary authorities control inflation but their policies are yet far from optimal level.</p></abstract>

This study focuses on: (1) finding the causes of inflation which follows the inflation theories such as Demand-Pull, Cost-Push and Structural inflation.(2) measuring the degree of inflation persistence in order to evaluate the ability of monetary policies to control inflation. Engle- Granger test and the Autoregressive Distributed Lag are applied to analyze the response of inflation to its determinants. The Grid bootstrap Method and Impulse Response Functions measure the inflation persistence. The results suggest that controlling the money supply is a key factor in controlling inflation. The appreciation of Rial exchange rate is an important factor of low inflation. It is increased as a result of Budget deficit while decreased due to oil price and real GDP. Inflation persistence follows the structural changes and finally permanent shocks die out after some horizons. Therefore, monetary authorities control inflation but their policies are yet far from optimal level.

Inflation Theories and Inflation Persistence in Iran

Zagreb International Review of Economics and Business

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

{"article-title":"Inflation Theories and Inflation Persistence in Iran"}

This study focuses on: (1) finding the causes of inflation which follows the inflation theories such as Demand-Pull, Cost-Push and Structural inflation.(2)...

Inflation Theories and Inflation Persistence in Iran

Published Online: Dec 12, 2020

Page range: 1 - 20

DOI: https://doi.org/10.2478/zireb-2020-0011

Keywords
inflation, inflation theories, inflation persistence

© 2020 Hamidreza Ghorbani Dastgerdi, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Inflation Theories and Inflation Persistence in Iran

Published Online: Dec 12, 2020

Page range: 1 - 20

DOI: https://doi.org/10.2478/zireb-2020-0011

Keywordsinflation, inflation theories, inflation persistence

© 2020 Hamidreza Ghorbani Dastgerdi, published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Keywords
inflation, inflation theories, inflation persistence