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

 
Author/Editor: Celasun, Oya ; Goswami, Mangal
 
Publication Date: December 01, 2002
 
Electronic Access: Free Full text (PDF file size is 604KB).
Use the free Adobe Acrobat Reader to view this PDF file

 
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: 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.
 
Series: Working Paper No. 02/205
Subject(s): Demand for money | Iran, Islamic Republic of | Inflation | Exchange rates

Author's Keyword(s): Iran | inflation | money demand | exchange rate
 
English
Publication Date: December 01, 2002
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA2052002 Pages: 21
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
Price Delivery Note: Prepayment required for individual copies. An annual subscription is $375.00 a year. It includes 12 monthly shipments and priority mail delivery. The Stock No. for the subscription is WPEA.
 
Please address any questions about this title to publications@imf.org