## Determinants of Inflation in Iran and Policies to Curb It (Working Paper No. WP/2022/181)

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---

### Introduction — overview and approach
- High and volatile inflation has been endemic in Iran, contributing to rising poverty and social tensions.
- Iran’s CPI inflation has fluctuated sharply around its annual average of 20 percent over the past two decades.
- With COVID-19 plus U.S. trade and financial sanctions and supply constraints:
  - annual CPI inflation reached nearly 50 percent at the end of FY 2020/21 (Iranian year 1399 that ended on March 20, 2021);
  - inflation averaged 40 percent during FY 2021/22 (Iranian year 1400).
- The new government that took office in August 2021 identified tackling inflation as a key economic priority.
- Purpose and methodology:
  - Study determinants of inflation in Iran to identify effective policies to curb it.
  - Uses a Vector Error Correction Model (VECM) to quantify short- and long-term impacts and to produce conditional forecasts.
  - Uses quarterly data between 2004Q2 (1383Q1) and 2021Q1 (1399Q4).

### Key empirical findings (summary)
- Long term:
  - Base and broad money growth drive inflation only in the long-term.
- Short term:
  - Nominal exchange rate depreciation vis-à-vis the US dollar, current (operating) budget deficits, and oil export volumes (proxy for sanctions intensity) are the main short-term drivers of inflation.
- Forecast implications:
  - Baseline (unconditional) forecast informed by historical data: inflation would continue rising in the next two years along with elevated deficits and continued depreciation of the rial.
  - Conditional forecasts with fiscal and monetary restraint: inflation would decline below 20 percent in the next two years, at a modest cost to non-oil GDP.
  - Stabilization in the exchange rate or increase in oil export volumes (e.g., doubling within the next year) would lower inflation significantly while supporting non-oil GDP.

### Inflation composition and sectoral patterns
- Consumption basket composition (FY 2021/22):
  - food and beverages, utilities (electricity, water, and gas), and transportation comprised 40 percent of the consumption basket;
  - other “core” items comprised the remaining 60 percent, half of which was housing.
- Sectoral contributors:
  - Food and beverages and housing and utilities have been the largest contributors to inflation.
  - Food price inflation in Iran has markedly surpassed that in the rest of the world, especially when sanctions intensified in the early and late 2010s.
  - Housing rental prices and housing sale prices spiked as consumers hedged against inflation by investing in housing, raising rents.

---

### Model: methodology and data (Section 3)
- Model: Vector Error Correction Model (VECM).
- Sample period: quarterly data between 2004Q2 and 2021Q1.
- Adjusted estimation sample: 63 observations (2005Q3 – 2021Q1).
- Baseline endogenous variables (vector Y): ln CPI, ln RGVAno, ln M0, CD, ln NER, ln OilX, ln OilP.
- Additional variables used in alternative specifications: CEX, M2, RER, RGVAo, FoodP, IMP.
- Variable transformations:
  - All variables except deficit expressed in logarithms.
  - Current fiscal deficit expressed in trillion rials.
- Stationarity and cointegration:
  - ADF tests: all variables are difference stationary.
  - Baseline VAR optimal lag p=5 → VECM lag p-1=4.
  - Johansen cointegration test: at least 1 cointegrating vector in all specifications.
- Baseline model specification: intercept and no trend and 1 cointegrating equation.

### Long-term (cointegrating) estimates — baseline (normalized coefficients)
- ln RGVAno: 0.91 *** (0.31)
- ln M0: 0.47 *** (0.06)
- CD/1000: 0.21% *** (0.03%)
- ln NER: 0.16 *** (0.04)
- ln OilX: -0.35 *** (0.04)
- ln OilP: 0.04 (0.04)
- Cointegrating equation statistics:
  - Adj. coef.: -0.25 *** (0.04)
  - R2 (adj. R2): 0.93 (0.87)
- Interpretations (baseline long-term elasticities and effects):
  - A 1 percent increase in base money (M0) increases inflation by 0.5 percent in the long term (baseline cointegrating elasticity reported as 0.47).
  - A 1 percent increase in nominal exchange rate (NER) increases inflation by 0.2 percent in the long term (coefficient 0.16).
  - An increase in the current fiscal deficit of 100 trillion rials increases inflation by 0.2 percent (CD/1000 coefficient 0.21%).
  - A 1 percent increase in oil export volume (OilX) decreases long-term inflation by 0.35 percent (coefficient -0.35).
  - Oil prices (OilP): long-term impact on inflation is insignificant in the baseline (coefficient 0.04, standard error 0.04).
  - Real non-oil GDP (RGVAno): positive long-term correlation with inflation in baseline (coefficient 0.91).
- Robustness note:
  - Signs and significance of fiscal and monetary policy variables (positive) and oil exports (negative) remain unchanged across alternative specifications.
  - Using M2 instead of M0 (column 3) reverses the long-term signs of RGVAno and NER and yields a positive long-term relationship between OilP and inflation.

### Short-term dynamics, shocks, and variance decomposition
- Short-term significant drivers (baseline): nominal exchange rate (NER), current budget deficit (CD), sanctions proxy (OilX).
- Short-term magnitudes:
  - A one standard deviation innovation in the nominal exchange rate would increase inflation in the next 4 quarters by 3.8 percent.
  - A one standard deviation innovation in the current deficit would increase inflation in the next 4 quarters by 3.0 percent.
- Variance decomposition:
  - Around 70 percent of the variation in inflation is explained by NER, current deficits, and OilX by quarter 4.
  - Base money (M0) and broad money (M2) do not strongly predict short-term variation in inflation, though monetary policy may affect inflation indirectly via exchange rate and aggregate demand.

### Model diagnostics and fit
- Error correction term: negative and significant in all specifications, implying a stable equilibrium.
- Speed of adjustment: previous quarter’s deviation from long-run equilibrium inflation is corrected at a speed of 25 percent in the baseline model (1).
- Fit and residual diagnostics for baseline inflation equation:
  - R2 (adjusted R2): 0.93 (0.87).
  - Autocorrelation LM test: no autocorrelation.
  - White heteroskedasticity test: no heteroskedasticity.
  - Jarque-Bera test: residuals are normal.

### Forecasts and scenario outcomes (Model (1))
- Baseline (unconditional) forecast horizon: 2021Q2-2024Q1.
- Baseline unconditional forecast:
  - For the next 8 quarters, model predicts inflation to remain high at over 50 percent, along with elevated deficits and continued exchange rate depreciation.
- Alternative conditional scenarios:
  - Higher oil prices with non-declining oil exports (no intensification in sanctions): inflation very similar to baseline (referenced to IMF April 2022 WEO oil price prediction).
  - Fiscal restraint (no increases in the deficit in nominal terms): inflation would decline below 20 percent in the next two years, at a modest cost to non-oil GDP.
  - Fiscal and monetary restraint (only 10 percent growth in the monetary base): inflation would decline below 20 percent more quickly and could even reach single digits, but the cost to non-oil GDP would be higher.
  - Stronger rial (no nominal depreciation) or some sanctions relief (higher oil exports):
    - Example: oil exports grow by 20 percent each quarter, doubling from 1mbpd to over 2mbpd in a year.
    - Under these scenarios, inflation would drop by about 10 percentage points compared to the baseline, while non-oil GDP would remain unchanged or increase.

---

### Policy implications (Section 5) — summary of drivers
- Sanctions:
  - Contribute to inflation directly through import shortages and supply constraints, and indirectly through depreciating exchange rates and higher government deficits resulting from lower oil exports and foreign exchange receipts.
- Financing and monetary expansion:
  - Lack of external funding means fiscal deficits are increasingly financed by lending by banks and Iran’s sovereign wealth fund (NDFI), which expands the supply of money.
  - Expansionary monetary and fiscal policies (cheap private credit and higher government spending) on top of sanctions fuel inflation and feed back into depreciating exchange rates.
- Price controls:
  - Reliance on distortive price controls (energy, foodstuffs, financial services) contains inflation only temporarily and has negative long-term consequences: undermine investment and growth, worsen poverty and inequality, impose large fiscal burdens, and weaken monetary policy effectiveness.

### Short-term priorities and recommended measures
- Reduce budget deficits gradually to contain inflation while avoiding undermining recovery if sanctions remain.
  - Cut wasteful energy subsidies that largely benefit richer segments of the population, supported by a carefully devised public communication strategy.
  - Compensate poorer segments through better targeting of existing cash transfers.
  - Improve public spending efficiency, including through corruption control and governance reforms.
  - Mobilize non-oil revenue by broadening the tax base, eliminating tax exemptions, improving taxpayer compliance, and better managing public assets.
  - Physical and human capital spending (infrastructure, education, health) would be largely noninflationary as it would boost productivity.
  - Spend part of mobilized tax revenue on investments such as greening and digitalizing the economy to offset output and distributional costs.
- Tighten monetary policy and remove distortive controls:
  - Eliminate distortive energy price, foreign exchange, and interest rate controls.
  - Increase lending and deposit rates to stabilize the market exchange rate and reduce inflation.
  - Remove caps on lending and deposit rates far below inflation to address bank profitability and financial sector weaknesses.
  - Unify multiple exchange rates and discontinue multiple currency practices to remove rent seeking, restore competitiveness, and reduce reserve pressures.
  - Implement strategic communication and better targeted transfers to households affected by reforms.

### Medium-term reforms and institutional sequencing
- Strengthen the inflation targeting (IT) framework to improve monetary policy effectiveness:
  - Note: In 2020, the Central Bank of Iran adopted inflation targeting as its new monetary policy framework; implementation has so far not been effective in lowering inflation.
  - Over the medium term: reduce fiscal dominance, ensure CBI operational and financial autonomy, and improve CBI accountability and transparency in achieving its inflation target.
- Address banking sector weaknesses:
  - Start with an asset quality review of the largest banks, and strengthen bank resolution and supervision frameworks.
- Make monetary policy more market oriented:
  - Facilitate active use of interest rates, targeting monetary aggregates, develop government bond markets, and use macroprudential tools (for example, to limit excessive credit growth).
- Promote private sector development and diversification:
  - Remove price distortions and level the playing field with state enterprises and foundations.
  - Strengthen the rule of law and promote competition and innovation to increase productivity and reduce import dependence.
- Structural observations:
  - Inflation has been structurally high—averaging 20 percent in the last two decades—and much of the consumption basket is either imported or produced using imported goods, making domestic prices vulnerable to external price and exchange rate movements.
  - According to World Bank WITS, three quarters of Iran’s imported products (in USD) were non-consumer goods, including capital goods (33 percent), intermediate goods (28 percent), and raw materials (15 percent) used for domestic production.

### Sequencing and communication
- Reforms should be implemented gradually and communicated strategically to limit short-term hardship, with targeted compensation for vulnerable households.
- Sanctions relief would accelerate disinflation by stabilizing the exchange rate and facilitating reforms, but the recommended fiscal, exchange rate, monetary, and structural reforms are urgent even in the absence of sanctions relief.

*Source: IMF Working Paper — Determinants of Inflation in Iran and Policies to Curb It (1. Introduction, pages 3–8; 3. Inflation in Iran: Model Estimates; 5. Policy Implications).*

### 1. Introduction ........................................................................................................

### 1. Introduction

### Overview
- High and volatile inflation has been an endemic economic and social issue in Iran that has contributed to rising poverty and social tensions.
- Iran’s CPI inflation has fluctuated sharply over the past two decades around its annual average of 20 percent.
- With the COVID-19 pandemic hitting Iran’s economy on top of preexisting U.S. trade and financial sanctions and exacerbating supply constraints:
  - annual CPI inflation reached nearly 50 percent at the end of FY 2020/21 (Iranian year 1399 that ended on March 20, 2021);
  - inflation averaged 40 percent during FY 2021/22 (Iranian year 1400).
- The new government that took office in August 2021 identified tackling inflation as a key economic priority.

### Purpose and approach
- The paper studies the determinants of inflation in Iran to identify effective policies to fight it.
- Methodology:
  - Uses a Vector Error Correction Model (VECM) to quantify short- and long-term impacts of various domestic and external factors on inflation and to produce conditional forecasts.
  - Uses quarterly data between 2004Q2 (1383Q1) and 2021Q1 (1399Q4).
- Main empirical finding:
  - Base and broad money growth drive inflation only in the long-term.
  - Nominal exchange rate depreciation vis-à-vis the US dollar, current (operating) budget deficits, and oil export volumes (a proxy for sanctions intensity) are the main drivers of inflation in the short term.

### Baseline and conditional forecast outcomes
- Under the baseline (unconditional) forecast informed by historical data:
  - inflation would continue rising in the next two years along with elevated deficits and continued depreciation of the rial.
- Under conditional forecasts with fiscal and monetary restraint:
  - inflation would decline below 20 percent in the next two years, albeit at a modest cost to non-oil GDP.
- Other scenario results:
  - A stabilization in the exchange rate or an increase in oil export volumes (e.g., doubling within the next year, for instance through some sanctions relief) would also lower inflation significantly while supporting non-oil GDP.

### Inflation composition and recent sectoral patterns
- Consumption basket composition (FY 2021/22):
  - food and beverages, utilities (electricity, water, and gas), and transportation comprised 40 percent of the consumption basket;
  - other “core” items comprised the remaining 60 percent, half of which was housing.
- Sectoral contributors:
  - Food and beverages and housing and utilities have been the largest contributors to inflation.
  - Food price inflation in Iran has markedly surpassed that in the rest of the world, especially when economic sanctions intensified during the early and late 2010s.
  - Housing rental prices and housing sale prices spiked in recent years as consumers hedge against inflation by investing in housing, feeding inflation by raising rents.

### Domestic and external drivers (empirical associations)
- Domestic:
  - Large fiscal deficits and rapid liquidity growth were associated with high inflation, particularly during the mid-2000s, during intensified sanctions in the early and late 2010s, and recently due to the COVID-19 crisis.
  - Negative real interest rates enabled by financial repression have likely added to inflationary pressures during intensified sanctions and the COVID-19 pandemic.
  - Non-oil output gap (HP filter) has not been clearly associated with inflation, though non-oil output growth appears positively associated with inflation at a one-year lag.
- External:
  - Exchange rate depreciation has been highly associated with inflation; renewed sanctions and the COVID-19 crisis led to sharp depreciation in the market exchange rate, raising import prices and passing through to domestic inflation.
  - Import volumes seem negatively correlated with inflation, particularly during intensified sanctions that likely caused import shortages.
  - Sanctions decreased export volumes, which have been negatively associated with inflation.
  - Oil prices have been positively associated with inflation in the short term; however, the decline in oil prices during the COVID-19 crisis did not offset inflationary pressures from currency depreciation and expansionary fiscal and monetary policies.
- Global environment:
  - The rise in global oil and food prices since the beginning of 2021 and supply chain disruptions are likely to add to inflationary pressures going forward.

### Contribution relative to existing literature
- Earlier and recent studies use various approaches (money market equilibrium via error correction, structural VAR, VECM, ARDL, Bayesian Model Averaging) and report mixed findings on monetary vs external drivers.
- This paper contributes by:
  - Using a VECM consistent with much of the literature on Iran.
  - Focusing on a larger set of factors: fiscal deficits and expenditures, base and broad money supply, oil and non-oil GDP, sanctions proxied by oil exports, global oil and food prices, market exchange rate vis-à-vis the US dollar, and non-oil imports.
  - Covering more recent periods (following the reimposition of US sanctions in 2018) and using CBI’s recently published CPI and budget data after a three-year suspension.

*_Source: IMF Working Paper — Determinants of Inflation in Iran and Policies to Curb It (1. Introduction, pages 3–8)._*

### 3.   Inflation in Iran: Model Estimates

### 3.   Inflation in Iran: Model Estimates

### Methodology and data
- Model: Vector Error Correction Model (VECM), a VAR with cointegration restrictions.
- Sample period: quarterly data between 2004Q2 and 2021Q1.
- Adjusted estimation sample: 63 observations (2005Q3 – 2021Q1).
- Baseline endogenous variables (vector Y): ln CPI, ln RGVAno, ln M0, CD, ln NER, ln OilX, ln OilP.
- Additional variables used in alternative specifications: CEX, M2, RER, RGVAo, FoodP, IMP.
- Variable transformations:
  - All variables except deficit expressed in logarithms.
  - Current fiscal deficit expressed in trillion rials.
- Stationarity and cointegration:
  - Augmented Dickey-Fuller (ADF) tests: all variables are difference stationary.
  - Baseline VAR optimal lag p=5 → VECM lag p-1=4.
  - Johansen cointegration test: at least 1 cointegrating vector in all specifications.
- Baseline model specification: default model with intercept and no trend and 1 cointegrating equation.

### Long-term (cointegrating) estimates — baseline (column 1)
- Normalized cointegrating coefficients (standard errors in parentheses):
  - ln RGVAno: 0.91 *** (0.31)
  - ln M0: 0.47 *** (0.06)
  - CD/1000: 0.21% *** (0.03%)
  - ln NER: 0.16 *** (0.04)
  - ln OilX: -0.35 *** (0.04)
  - ln OilP: 0.04 (0.04)
- Cointegrating equation statistics:
  - Adj. coef.: -0.25 *** (0.04)
  - R2 (adj. R2): 0.93 (0.87)
- Interpretation (baseline long-term relationships):
  - A 1 percent increase in base money (M0) increases inflation by 0.5 percent in the long term (baseline cointegrating elasticity reported as 0.47).
  - A 1 percent increase in nominal exchange rate (NER) increases inflation by 0.2 percent in the long term (coefficient 0.16).
  - An increase in the current fiscal deficit of 100 trillion rials increases inflation by 0.2 percent (CD/1000 coefficient 0.21%).
  - A 1 percent increase in oil export volume (OilX) decreases long-term inflation by 0.35 percent (coefficient -0.35).
  - Oil prices (OilP): long-term impact on inflation is insignificant in the baseline (coefficient 0.04, standard error 0.04).
  - Real non-oil GDP (RGVAno): positive long-term correlation with inflation in baseline (coefficient 0.91).
- Robustness:
  - Signs and significance of fiscal and monetary policy variables (positive) and oil exports (negative) remain unchanged across alternative specifications.
  - Using M2 instead of M0 (column 3) reverses the long-term signs of RGVAno and NER and yields a positive long-term relationship between OilP and inflation.

### Short-term dynamics and shock responses
- Short-term significant drivers of inflation (baseline):
  - Nominal exchange rate (NER)
  - Current budget deficit (CD)
  - Sanctions proxy (oil exports, OilX)
- Magnitudes of short-term responses:
  - A one standard deviation innovation in the nominal exchange rate would increase inflation in the next 4 quarters by 3.8 percent.
  - A one standard deviation innovation in the current deficit would increase inflation in the next 4 quarters by 3.0 percent.
- Variance decomposition:
  - Around 70 percent of the variation in inflation is explained by NER, current deficits, and OilX by quarter 4.
  - Base money (M0) and broad money (M2) do not strongly predict short-term variation in inflation, though monetary policy may affect inflation indirectly via exchange rate and aggregate demand.

### Model diagnostics and fit
- Error correction term:
  - Negative and significant in all model specifications, implying a stable equilibrium.
  - Speed of adjustment: previous quarter’s deviation from long-run equilibrium inflation is corrected at a speed of 25 percent in the baseline model (1).
- Fit and residual diagnostics for baseline inflation equation:
  - R2 (adjusted R2): 0.93 (0.87).
  - Autocorrelation LM test: no autocorrelation.
  - White heteroskedasticity test: no heteroskedasticity.
  - Jarque-Bera test: residuals are normal.

### Forecasts and scenarios (using Model (1))
- Baseline (unconditional) forecast horizon: 2021Q2-2024Q1.
- Baseline unconditional forecast:
  - For the next 8 quarters, model predicts inflation to remain high at over 50 percent, along with elevated deficits and continued exchange rate depreciation.
- Alternative conditional scenarios and outcomes:
  - Higher oil prices with non-declining oil exports (no intensification in sanctions):
    - Inflation very similar to baseline (referenced to IMF April 2022 WEO oil price prediction).
  - Fiscal restraint (no increases in the deficit in nominal terms):
    - Inflation would decline below 20 percent in the next two years, at a modest cost to non-oil GDP.
  - Fiscal and monetary restraint (only 10 percent growth in the monetary base):
    - Inflation would decline below 20 percent more quickly and could even reach single digits, but the cost to non-oil GDP would be higher.
  - Stronger rial (no nominal depreciation) or some sanctions relief (higher oil exports):
    - Example scenario: oil exports grow by 20 percent each quarter, doubling oil exports from 1mbpd to over 2mbpd in a year (possible through some sanctions relief).
    - Under these scenarios, inflation would drop by about 10 percentage points compared to the baseline, while non-oil GDP would remain unchanged or increase.

*Source: Author’s estimates as presented in "3.   Inflation in Iran: Model Estimates."*

### 5.    Policy Implications

### 5.    Policy Implications

### Summary of drivers of high inflation
- Sanctions contribute to inflation directly through import shortages and supply constraints, and indirectly through depreciating exchange rates and higher government deficits resulting from lower oil exports and foreign exchange receipts.
- Lack of external funding means fiscal deficits are increasingly financed by lending by banks and Iran’s sovereign wealth fund (NDFI), which expands the supply of money.
- Expansionary monetary and fiscal policies (cheap private credit and higher government spending) on top of sanctions fuel inflation further and feed back into depreciating exchange rates.
- The policy mix has relied heavily on distortive price controls (energy, foodstuffs, financial services), which can contain inflation only temporarily and have negative long-term consequences: undermine investment and growth, worsen poverty and inequality, impose large fiscal burdens, and weaken monetary policy effectiveness.

### Short-term priorities and policy recommendations
- Reduce budget deficits gradually to contain inflation while avoiding undermining recovery if sanctions remain.
  - Cut wasteful energy subsidies that largely benefit richer segments of the population, supported by a carefully devised public communication strategy to secure broad acceptance.
  - Compensate poorer segments through better targeting of existing cash transfers.
  - Improve public spending efficiency, including through corruption control and governance reforms.
  - Mobilize non-oil revenue by broadening the tax base, eliminating tax exemptions, improving taxpayer compliance, and better managing public assets.
  - Physical and human capital spending (infrastructure, education, health) would be largely noninflationary as it would boost productivity.
  - Spending part of the mobilized tax revenue on investments such as greening and digitalizing the economy would offset output and distributional costs (Ture (2022) referenced).
- Tighten monetary policy and remove distortive controls:
  - Eliminate distortive energy price, foreign exchange, and interest rate controls.
  - Increase lending and deposit rates to stabilize the market exchange rate and reduce inflation.
  - Remove caps on lending and deposit rates far below inflation to address bank profitability and financial sector weaknesses.
  - Unify multiple exchange rates and discontinue multiple currency practices to remove rent seeking, restore competitiveness, and reduce reserve pressures.
  - Implement strategic communication and better targeted transfers to households affected by reforms to limit adverse distributional impacts.

### Medium-term reforms
- Strengthen the inflation targeting (IT) framework to improve monetary policy effectiveness in reducing inflation durably.
  - Note: In 2020, the Central Bank of Iran adopted inflation targeting as its new monetary policy framework; implementation has so far not been effective in lowering inflation.
  - Over the medium term, strengthen CBI governance and operations: reduce fiscal dominance, ensure CBI operational and financial autonomy, and improve CBI accountability and transparency in achieving its inflation target.
  - Address banking sector weaknesses: start with an asset quality review of the largest banks, and strengthen bank resolution and supervision frameworks.
  - Make the monetary policy framework more market oriented by facilitating active use of interest rates, targeting monetary aggregates, developing government bond markets, and using macroprudential tools (for example, to limit excessive credit growth).
- Promote private sector development and diversification to address structural inflation:
  - Remove price distortions and level the playing field with state enterprises and foundations.
  - Strengthen the rule of law and promote competition and innovation to increase productivity and reduce import dependence.
  - Structural features: inflation has been structurally high—averaging 20 percent in the last two decades—and much of the consumption basket is either imported or produced using imported goods, which makes domestic prices vulnerable to external price and exchange rate movements.
  - According to World Bank WITS, three quarters of Iran’s imported products (in USD) were non-consumer goods, including capital goods (33 percent), intermediate goods (28 percent), and raw materials (15 percent) used for domestic production.

### Institutional and policy sequencing
- Reforms should be implemented gradually and communicated strategically to limit short-term hardship, with targeted compensation for vulnerable households.
- While sanctions relief would accelerate disinflation by stabilizing the exchange rate and facilitating reforms, the recommended fiscal, exchange rate, monetary, and structural reforms are urgent even in the absence of sanctions relief.

*Source: wpiea2022181-print-pdf - 5.    Policy Implications*

### References

### wpiea2022181-print-pdf - References

### References
- Barrett, Philip (2019). Exchange Rate Passthrough in Iran. Unpublished manuscript, IMF, March 2019.  
- Benedek, Dora, Sebastian Beer, Maria Coelho, and Alain Jousten (2021). Islamic Republic of Iran: Options for Broadening the Base of Direct and Indirect Taxes. IMF Technical Assistance Report, December 2021. 
- Bonato, Leo (2007). Money and Inflation in the Islamic Republic of Iran. IMF Working Paper WP/07/119. 
- Celasun, Oya and Mangal Goswami (2002). An Analysis of Money Demand and Inflation in the Islamic Republic of Iran. IMF Working Paper WP/02/205. 
- De Clerk, Sage, Matthew Appleby, Lindy Bodewig, Anna Obiang, and Graham Prentice (2022). Islamic Republic of Iran: Strengthening State Non-Financial Asset Management. IMF Technical Assistance Report, March 2022. 
- Esfahani, Hadi Salehi, Kamiar Mohaddes, and M. Hashem Pesaran (2013). Oil Exports and the Iranian Economy. The Quarterly Review of Economics and Finance 53 (2013) 221-237. 
- Hemmati, Abdolnaser, Leili Niakan, and Vida Varahrami (2018). The External Determinants of Inflation: The Case of Iran. Iranian Economic Review, Vol. 22, No. 3, 2018. pp. 745-756 
- Jenkins, Garles, Andja Komso, Graham Whyte, Wyatt Grant and Bruce Quigley (2022). Islamic Republic of Iran: Revenue Administration: Review of Risk Management and Digitalization Strategy. IMF Technical Assistance Report, February 2022.  
- Laudati, Dario and M. Hashem Pesaran (2021). Identifying the Effects of Sanctions on the Iranian Economy using Newspaper Coverage. Working Paper, University of Southern California, July 27 2021. 
- Liu, Olin and Olumuyiwa S. Adedeji (2000). Determinants of Inflation in the Islamic Republic of Iran—A Macroeconomic Analysis. IMF Working Paper WP/00/127. 
- Majdzadeh, M. A., Ghazanfari, A., and Mehrara, M. (2015). Determinants of inflation in Iran based on Bayesian Model Averaging (BMA). International Letters of Social and Humanistic Sciences, 43, 10-17. 
- Mazarei, Adnan (2020). Inflation targeting in the time of sanctions and pandemic. The SAIS Initiative for Research on Contemporary Iran. 
- Mohammadi Khyareh, M. (2020). Monetary policy and inflation dynamics in Iran: New evidences. Journal of Development and Capital, 5(1), 111-130. 
- Sadeghi, A. and Tayebi, S. (2018). Effects of International Sanctions and Other Determinants on Iran’s Inflation Rate (1981-2014). Iranian Journal of Economic Research, 23(74), 33-57 
- Ture, H. Elif (2022). The welfare impact of tax policy reforms in Iran. IMF Working Paper (forthcoming). 
- World Bank (2020). Price Controls: Good Intentions, Bad Outcomes. Global Economic Prospects: Slow Growth, Policy Challenges, Special Focus 1, January 2020. 

### Document
- Determinants of Inflation in Iran and Policies to Curb It  
- Working Paper No. WP/2022/181

*wpiea2022181-print-pdf - References*

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_Source: https://www.imf.org/-/media/files/publications/wp/2022/english/wpiea2022181-print-pdf.pdf_