Volume 8, Issue 3 (2008)                   QJER 2008, 8(3): 21-42 | Back to browse issues page

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Hosseini S S, Mohtashami T. The Relations of Money Growth and Inflation in Iran Economy; Interruption or Satiable?. QJER. 2008; 8 (3) :21-42
URL: http://ecor.modares.ac.ir/article-18-9661-en.html
1- University of Tehran
Abstract:   (5904 Views)
The theory of quantity of money in that there exists a one-to-one relation between money growth and inflation, that means a highly and a continuous of rate of money growth leads to a high rate of inflation. During the recent years with the divergence of growth of money from inflation in the Iran economy leads to the opinion that an interruption has occurred between the growth of money and inflation. By the way, the main objective of this paper is to investigate the relationship between the growth of money and inflation by using the data of the 1350-2005 periods. The model that was used to investigate the relation of growth of money and inflation is a model that stemmed from quantity theory of money and is combining with the Phillips curve to model inflation to be linked trough expectations. The results revealed there exist a stable relationship between the growth of money and inflation and this states that in the long run one percent increase in the growth of money will increase inflation by 0.89 percent.
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Received: 2010/02/1 | Accepted: 2010/02/1 | Published: 2010/02/1

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