خلاصة:
The purpose of this study is to analyze the effects of real and nominal variables in inflation by using a Vector Autoregressive Model (VAR). This model used liquidity growth، exchange rates growth، inflation rate، expected inflation as nominal variable and real output gap as real variable by employing seasonal data. The results show that the cause of inflation is not just the liquidity growth، the chronic inflation is also related to real variables. The VAR results show that in the short-run، nominal variables such as liquidity growth، and exchange rates do affect inflation rate. In the long run، however، stability of prices depends not only on monetary growth but also on the expected inflation and real output gap. The empirical results indicate that liquidity growth is endogenous and nominal variables are related to real output gap. The paper concludes that it is not enough to rely just on monetary policy to control prices in the Iranian economy and in the long run، real output gap should be reduced.
ملخص الجهاز:
Studies Based on the Effect of Liquidity Growth on Inflation Masoud Nili (1985) in his research uses a model consisting of eight equations for government expenditure, monetary base, liquidity volume, non-oil production, gross domestic product, price levels, consumption, and investment, to examine the effects of changing variables that have influenced the increase in money volume; the result of these equations indicates that a 10 percent increase in liquidity leads to an increase of more than 12 percent in prices.
Studies Based on the Effect of Real Variables and Structural Inflation Mousavi Azad Kasmaei, in his research to examine the relationship between the government budget deficit and economic growth in Iran, has used a vector autoregression model.
Based on this and based on the pattern introduced by Peter Johnson, and considering the freedom of vector autoregression patterns in selecting variables, the growth of liquidity volume, the growth of the free market exchange rate (considering theoretical backgrounds and studies conducted in Iran and other parts of the world), the Gross Domestic Product gap as a real variable (based on the structuralist theory and the formation of inflation in economies with unbalanced structures and the generalized Phillips curve), and the previous period's inflation (based on the adaptive expectations theory) as expected inflation have been included in the pattern.
Given the results obtained from estimating the vector autoregression pattern, it can be said that in the short term, inflationary expectations, the exchange rate, and liquidity volume affect inflation, and as a result of the change in one, other variables are adjusted, but the output gap, which is a real variable, will have an effect in the long term.
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