Volume 10, Issue 1 (2010)
QJER 2010, 10(1): 0-0 |
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Hosseini Nasab E, Rezagholizadeh M. Analysis of the Fiscal Sources of Inflation in Iran Giving Special Emphasis to Budget Deficits. QJER 2010; 10 (1)
URL: http://ecor.modares.ac.ir/article-18-1271-en.html
URL: http://ecor.modares.ac.ir/article-18-1271-en.html
1- Tarbiat Modares University, management and Economics Faculty
2- Tarbiat Modares University, Management and Economics Faculty
2- Tarbiat Modares University, Management and Economics Faculty
Abstract: (14224 Views)
This paper addresses two questions. Does inflation in Iran stem from fiscal policy? Does inflationary impact depend upon the sources of budget deficit financing? Although the above questions have already been studied, there is no consensus on the findings, since the results are sensitive to the methodologies and the time period covered by the data.
This paper employs vector autoregressions, impulse response functions, variance decomposition and cointegration techniques to estimate the short and long term relationship between inflation and a number of fiscal indicators in Iran. The annual data are used over the period 1973 to 2006. Particular emphasis is placed on the government budget deficit predominantly financed by government borrowing. The results indicate that inflation is mostly induced by import prices, oil revenue and government budget deficit.
Keywords: C22, Inflation, Budget Deficient, Vector Autoregression, Impulse Response Functions, Variance Decomposition
JEL Classification: E31
Received: 2010/05/10 | Accepted: 2010/05/10 | Published: 2010/05/10
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