An Analysis of Money Demand and Inflation in the Islamic Republic of Iran
An Analysis of Money Demand and Inflation in the Islamic Republic of Iran

Author: Oya Celasun

Publisher: International Monetary Fund

Published: 2002-12

Total Pages: 30

ISBN-13:

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This study examines money demand and inflation dynamics in the Islamic Republic of Iran using quarterly data for the period 1990/91-2001/02 and tests whether the disinflation during 2000/01-2001/02 represents a structural break in the data. A long-run money market equilibrium condition is identified and the short-run behavior of the inflation, measured in terms of non-administered component of the consumer price index (CPI) is modeled conditional on the disequilibria in the money market. Estimation results indicate that the stabilization of the exchange rate on account of strong oil revenues during 2000/01-2001/02 buoyed the demand for domestic money and contributed to the decline in inflation. Tests of model stability do not point to a structural shift in the inflation equation during the period of analysis.

An Analysis of Money Demand and Inflation in the Islamic Republic of Iran
An Analysis of Money Demand and Inflation in the Islamic Republic of Iran

Author: Oya Celasun

Publisher:

Published: 2006

Total Pages: 22

ISBN-13:

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This study examines money demand and inflation dynamics in the Islamic Republic of Iran using quarterly data for the period 1990/91-2001/02 and tests whether the disinflation during 2000/01-2001/02 represents a structural break in the data. A long-run money market equilibrium condition is identified and the short-run behavior of the inflation, measured in terms of non-administered component of the consumer price index (CPI) is modeled conditional on the disequilibria in the money market. Estimation results indicate that the stabilization of the exchange rate on account of strong oil revenues during 2000/01-2001/02 buoyed the demand for domestic money and contributed to the decline in inflation. Tests of model stability do not point to a structural shift in the inflation equation during the period of analysis.

Determinants of Inflation in the Islamic Republic of Iran-A Macroeconomic Analysis
Determinants of Inflation in the Islamic Republic of Iran-A Macroeconomic Analysis

Author: Olumuyiwa Adedeji

Publisher: INTERNATIONAL MONETARY FUND

Published: 2000-07-01

Total Pages: 28

ISBN-13: 9781451854978

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This study establishes a framework for analyzing the major determinants of inflation in the Islamic Republic of Iran. An empirical model was estimated by taking into consideration disequilibria in the markets for money, foreign exchange, and goods. Results strongly support the need for a sustained prudent monetary policy in order to reduce inflation and stabilize the foreign exchange market. The estimation shows that an excess money supply generates an increase in the rate of inflation that, in turn, intensifies asset substitution (from money to foreign exchange), thereby weakening real demand for money and exerting pressures on the foreign exchange market. The study also found that a permanent rise in real income tends to increase the real demand for money and reduces inflation in the long run.

Money and Inflation in the Islamic Republic of Iran
Money and Inflation in the Islamic Republic of Iran

Author: Leo Bonato

Publisher: International Monetary Fund

Published: 2007-05

Total Pages: 24

ISBN-13:

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This paper looks at the determinants of inflation in Iran. Unlike the traditional estimates of the demand function for real money balances, the approach followed here focuses on the relationship between nominal variables and inflation. The model estimates are used to address the questions raised by the decline in inflation that occurred up to the first half of 2006, looking at the structural stability of the estimated relationships and the ability of the model to predict inflation at the end of the sample. The estimates confirm the strong relationship between money and inflation when M1 is used, with no evidence of a structural change.

Islamic Republic of Iran
Islamic Republic of Iran

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2007-03-01

Total Pages: 101

ISBN-13: 1589064410

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Iran has received much attention from a geopolitical and regional standpoint, but its economic challenges have not attracted a similar degree of interest. With a population of 69 million, considerable hydrocarbon resources, a dynamic and entrepreneurial middle class, and a relatively well-educated labor force, Iran's economic potential is considerable. This volume takes stock of critical developments in the Iranian economy in recent years. The study reviews the key issues and policy responses, highlights the nature of the challenges ahead, and draws implications for the next phase of reforms. The authors conclude that major challenges remain, although significant advances have been made in recent years in opening up the economy to international trade and foreign direct investment, encouraging the private sector, removing exchange restrictions, reforming the tax system, and enhancing macroeconomic management.

Islamic Republic of Iran
Islamic Republic of Iran

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2002-09-27

Total Pages: 127

ISBN-13: 1451818963

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This Selected Issues paper for the Islamic Republic of Iran deals with the analytical considerations relating to the choice of the exchange regime. This issue came to prominence with the exchange rate unification of March 2002. The paper also examines the competitiveness of the non-oil economy, fiscal sustainability, and the labor market of Iran. The paper concludes that a degree of flexibility in the exchange rate is needed at this juncture, given Iran’s exposure to oil price shocks, and the desire of the authorities to promote the development of non-oil activities.

Common Trends and Structural Change
Common Trends and Structural Change

Author: Mr.Torbjorn I. Becker

Publisher: International Monetary Fund

Published: 1999-06-01

Total Pages: 31

ISBN-13: 1451850425

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This paper uses a common trends model to study how prices, the black market exchange rate, money, and real output have developed over a period covering both pre- and post-revolution Iranian data. It is shown that monetary shocks have significant short-run effects on output, but permanent effects on the price level and exchange rate, that is, expansionary monetary policy is not consistent with achieving low inflation or a stable unified exchange rate. The real shocks generate higher growth and lower inflation, suggesting that supply-side policies are consistent with the goals in the Islamic Republic of Iran’s second five-year development plan.

Islamic Republic of Iran
Islamic Republic of Iran

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 2010-03-23

Total Pages: 21

ISBN-13: 1451981805

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This Selected Issues paper discusses the economics of energy price reform in the Islamic Republic of Iran. Economic policies in Iran have traditionally relied on the abundant availability of energy at a low price to finance the country’s economic development. Low domestic energy prices have resulted in excessive use of energy. Iran’s domestic energy use has been high by international standards, and energy demand growth has exceeded the rate of growth of per capita income, in contrast to the experience of the majority of low and high-income countries.

The Impact of Future Market on Money Demand in Iran
The Impact of Future Market on Money Demand in Iran

Author: Dr.Hossein Parsian

Publisher:

Published: 2014

Total Pages: 7

ISBN-13:

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The purpose of this study is modeling for money demand function in Iran, because the traditional Modeling was considered the money demand function only as a function of income and opportunity cost of currency holding. But, today according to innovations and financial initiatives and also economic uncertainty, the monetary changes cannot be explained through the simple relationship told by varies schools. Since, economic instabilities can do an important role in currency holding by economic agents and considering the impacts of such uncertainties, they create their own portfolio. But the importance of issue is that the money demand and its determinants play determining role in macroeconomic analysis and monetary policy making by the monetary authorities of a country. Generally, examining the amount of money demand in a country economic situation can be analyzed. So, in the present research using the mathematical techniques money demand function has been extract for Iran's economy.