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The Evaluation of the Relationship between Inflation and Production Gap in Iran
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Uosef Mehnatfar *   , Vajihe Mikaeelee |
| University of mazandaran |
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Abstract: (12662 Views) |
| TThe situation, in which the general level of the prices increases improperly and continuously, is called inflationary situation. Inflation always has been known as an economical problem and some remedies have been proposed to control it. One of the solutions is production. Using the Auto regression Model (VAR) this article aims to evaluate the mutual relation of the inflation rate and production gap in Iran's Economy during (1971-2011). Finding new remedies, the policy-makers and economic programmer's would be able to control the inflation with comprehensive programs and goals. The results of the study show that the root of inflation in Iran is not merely a monetary relationship. Results indicate that of momentary interaction of the relationship of gross domestic production gap has been decreased at the beginning and then has been increased at the long-term but regarding the variance Analysis, as the time passes the trend tends to increase. The results also show that not only the monetary policies will not be able to control the inflation rate but also the production should be considered at the real section of Economy. |
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| Keywords: Inflation rate, Production rate, Auto regression (VAR). |
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Full-Text [PDF 287 kb]
(6228 Downloads)
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Type of Study: Applicable |
Subject:
Special
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