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Showing 43 results for Inflation
Dr Soheil Roudari, Dr Hamidreza Maghsoudi, Dr Farzaneh Ahmadian-Yazdi,
Volume 0, Issue 0 (12-2024)
Volume 0, Issue 0 (12-2024)
Abstract
Aim and Introduction
One of the most important issues in Iran's economy is related to managing the exchange rate, inflation and budget deficit. During tightening of the sanctions, the oil revenues are limited which potentially leads to an increase in the budget deficit as well as a decrease in the currency supply which accelerates the exchange rate. On the other hand, with the increase in the budget deficit, the probability of borrowing from the banking system and also the issuance of bonds increases, which in turn rise the monetary base and liquidity. In addition, inflationary expectations also increase, which can be effective in improving assets prices. With an increase in inflation, based on the inflation-currency spiral, there is a possibility of a grow in exchange rate in order to maintain the competitiveness of domestic production. This can accelerate the price of imported commodities and cause domestic inflation again. With the increase in inflation and households spending, nominal wages will have a higher growth compared to normal conditions in order to maintain minimum purchasing power, which can again face the government with limited resources and more borrowing to meet current expenses. From the monetarists’ point of view and the classical economics, in general, the main stimulator in increasing inflation is the growth of money and liquidity. However, from the post-Keynesian economists’ point of view, inflation increases the demand of money and subsequently liquidity. On the other hand, with an increase in the exchange rate, the government's expenses usually increase more than its income, which can lead to an increase in the government's budget deficit. Also, considering the existence of a monopoly in currency supply by the central bank, the hypothesis of using currency exchange revenues (the difference between free and budget-approved currency) will be applicable and this issue can raise the impact of the budget deficit on the exchange rate. Therefore, there has always been a serious challenge among economists as well as macroeconomic decision-makers about the connectedness between macroeconomic variables. What is the main driver of the network between macro variables? Is there a different way of communication in different thresholds of their growth rate? These cases show that it is very important to examine the time-varying interrelationships between these macroeconomic variables.
Accordingly, there is a complex connection between exchange rate, inflation, budget deficit and liquidity, which can be varied in different years. Therefore, in this research, using the TVP-TVAR technique, the time-varying connectedness across exchange rate, inflation, budget deficit and liquidity is examined during March, 2006 to August, 2023.
Methodology
In the current research, the relationship between exchange rate fluctuations, inflation, government budget deficit and liquidity based on monthly data using the TVP-TVAR technique is investigated. It should be noted that all the required information is extracted from the economic indicators of the central bank, and the government's budget deficit data from 2017 onward are extracted from Iran's Program and Budget Organization.
Findings
The results show that exchange rate and liquidity are, respectively, the largest net transmitter of volatilities in the network. Moreover, inflation rate and government budget deficit, respectively, are the largest net receivers of shocks from network. On average, the TCI is 23%, and more than 70% of this interrelationship between variables is explained by other factors such as political ones. Moreover, if the variables underestimated grow up to 36% annually (3% monthly), the connection between them will be cut off. In the conditions of decreasing the growth rate of variables up to -3% per month, the exchange rate has played a dominant role and its volatilities are transferred more strongly to inflation rate and less strongly to the budget deficit and liquidity.
If the growth rate of the variables is up to 24% annually (threshold of +2% monthly growth rate), the exchange rate volatilities are transferred to inflation and no interconnectedness between other variables is observed.
Discussion and Conclusion
Our results show that, on average, the total connectedness index from 2012 to 2016 has been upward, which is caused by the tightening of sanctions and the increase in inflationary expectations, psychological factors and emotions. Moreover, the connectedness between them is increased in 2018 and 2019, which is related to the intensification of sanctions and the reduction of currency supply and the increase in inflation and budget deficit and subsequently the increase in the issuance of debt securities in the capital market in order to manage the budget deficit and as a result increase liquidity. The results show that exchange rate is a main net transmitter of volatilities in most years and the inflation rate is a main net receiver of volatilities in many years. From 2016 onwards, the budget deficit is the net receiver of shocks from network in most periods, except for one period in 2019. It is interesting to note that in 2019, with the increase in the budget deficit and the issuance of debt securities, the budget deficit is transmitter, liquidity is receiver and inflation is more receiver variable than liquidity in the network. Totally, the results show that exchange rate is the major net transmitter of shocks to other macro variables.
Moreover, based on the results of the sensitivity analysis and thresholds effect, if the growth rate of variables is up to 24% annually (threshold of +2% monthly growth rate), the exchange rate fluctuations will be transferred to inflation and no connection between other components is observed. This shows that the macroeconomic management of the economy is very sensitive to the growth rate of the thresholds of the macroeconomic components, and before the political economy and also the factors of expectations and emotions dominated the economy, the macroeconomic management, especially the exchange rate, is required. Otherwise, it is impossible to manage the investigated variables with monetary and fiscal policies. Therefore, the managed floating exchange rate should be taken into consideration and if the goal is to manage the network using macroeconomic theories, the variables should not be allowed to increase by more than 24% annual growth. Other factors such as the political economy, and especially inflationary expectations will get the dominant role in the economy
One of the most important issues in Iran's economy is related to managing the exchange rate, inflation and budget deficit. During tightening of the sanctions, the oil revenues are limited which potentially leads to an increase in the budget deficit as well as a decrease in the currency supply which accelerates the exchange rate. On the other hand, with the increase in the budget deficit, the probability of borrowing from the banking system and also the issuance of bonds increases, which in turn rise the monetary base and liquidity. In addition, inflationary expectations also increase, which can be effective in improving assets prices. With an increase in inflation, based on the inflation-currency spiral, there is a possibility of a grow in exchange rate in order to maintain the competitiveness of domestic production. This can accelerate the price of imported commodities and cause domestic inflation again. With the increase in inflation and households spending, nominal wages will have a higher growth compared to normal conditions in order to maintain minimum purchasing power, which can again face the government with limited resources and more borrowing to meet current expenses. From the monetarists’ point of view and the classical economics, in general, the main stimulator in increasing inflation is the growth of money and liquidity. However, from the post-Keynesian economists’ point of view, inflation increases the demand of money and subsequently liquidity. On the other hand, with an increase in the exchange rate, the government's expenses usually increase more than its income, which can lead to an increase in the government's budget deficit. Also, considering the existence of a monopoly in currency supply by the central bank, the hypothesis of using currency exchange revenues (the difference between free and budget-approved currency) will be applicable and this issue can raise the impact of the budget deficit on the exchange rate. Therefore, there has always been a serious challenge among economists as well as macroeconomic decision-makers about the connectedness between macroeconomic variables. What is the main driver of the network between macro variables? Is there a different way of communication in different thresholds of their growth rate? These cases show that it is very important to examine the time-varying interrelationships between these macroeconomic variables.
Accordingly, there is a complex connection between exchange rate, inflation, budget deficit and liquidity, which can be varied in different years. Therefore, in this research, using the TVP-TVAR technique, the time-varying connectedness across exchange rate, inflation, budget deficit and liquidity is examined during March, 2006 to August, 2023.
Methodology
In the current research, the relationship between exchange rate fluctuations, inflation, government budget deficit and liquidity based on monthly data using the TVP-TVAR technique is investigated. It should be noted that all the required information is extracted from the economic indicators of the central bank, and the government's budget deficit data from 2017 onward are extracted from Iran's Program and Budget Organization.
Findings
The results show that exchange rate and liquidity are, respectively, the largest net transmitter of volatilities in the network. Moreover, inflation rate and government budget deficit, respectively, are the largest net receivers of shocks from network. On average, the TCI is 23%, and more than 70% of this interrelationship between variables is explained by other factors such as political ones. Moreover, if the variables underestimated grow up to 36% annually (3% monthly), the connection between them will be cut off. In the conditions of decreasing the growth rate of variables up to -3% per month, the exchange rate has played a dominant role and its volatilities are transferred more strongly to inflation rate and less strongly to the budget deficit and liquidity.
If the growth rate of the variables is up to 24% annually (threshold of +2% monthly growth rate), the exchange rate volatilities are transferred to inflation and no interconnectedness between other variables is observed.
Discussion and Conclusion
Our results show that, on average, the total connectedness index from 2012 to 2016 has been upward, which is caused by the tightening of sanctions and the increase in inflationary expectations, psychological factors and emotions. Moreover, the connectedness between them is increased in 2018 and 2019, which is related to the intensification of sanctions and the reduction of currency supply and the increase in inflation and budget deficit and subsequently the increase in the issuance of debt securities in the capital market in order to manage the budget deficit and as a result increase liquidity. The results show that exchange rate is a main net transmitter of volatilities in most years and the inflation rate is a main net receiver of volatilities in many years. From 2016 onwards, the budget deficit is the net receiver of shocks from network in most periods, except for one period in 2019. It is interesting to note that in 2019, with the increase in the budget deficit and the issuance of debt securities, the budget deficit is transmitter, liquidity is receiver and inflation is more receiver variable than liquidity in the network. Totally, the results show that exchange rate is the major net transmitter of shocks to other macro variables.
Moreover, based on the results of the sensitivity analysis and thresholds effect, if the growth rate of variables is up to 24% annually (threshold of +2% monthly growth rate), the exchange rate fluctuations will be transferred to inflation and no connection between other components is observed. This shows that the macroeconomic management of the economy is very sensitive to the growth rate of the thresholds of the macroeconomic components, and before the political economy and also the factors of expectations and emotions dominated the economy, the macroeconomic management, especially the exchange rate, is required. Otherwise, it is impossible to manage the investigated variables with monetary and fiscal policies. Therefore, the managed floating exchange rate should be taken into consideration and if the goal is to manage the network using macroeconomic theories, the variables should not be allowed to increase by more than 24% annual growth. Other factors such as the political economy, and especially inflationary expectations will get the dominant role in the economy
Mr Abolfazl Dehghani, Dr Kazem Yavari, Dr Mehdi Haj Amini, Dr Mohammad Hassan Zare,
Volume 0, Issue 0 (12-2024)
Volume 0, Issue 0 (12-2024)
Abstract
Aim and Introduction
Measurement and examination of unobservable variables directly such as inflation expectations or potential output, is really challenging. Inflation expectations have been considered a key variable in many macroeconomic models, particularly in the realm of monetary economics. Macroeconomic models assume that economic agents make consumption, savings, and labor market decisions based on their perception of future inflation levels, and these decisions play a great role in realizing economic variables, including inflation. The role of inflation expectations differs from other inflation-generating factors. While factors such as money supply, budget deficit, exchange rate, and to some extent, economic sanctions can be considered as policy tools. Inflation expectations normally result from the interaction of other factors and may potentially predict future inflation. For example, an increase in the budget deficit, if not addressed independently by the Central Bank, can lead to an increase in money supply, inflation, and intensification of inflation expectations. Thus, inflation expectations can be considered as a variable that evolves within society and changes due to other inflation-generating factors. However, once formed, these expectations themselves become significant factors in inflation and other economic variables. Unlike many countries, in Iran, despite the importance of inflation due to decades of double-digit inflation, no action has been taken to produce and provide survey data related to this variable. However, according to existing literature, comparing the results of alternative methods incorporating inflation expectations with survey data can provide valuable insights. In practice, incorporating inflation expectations can improve the performance of inflation prediction models.
Methodology
Empirical research indicates that methods that consider inflation expectations along with its fluctuations and dynamics outperform models that do not consider these dynamics. Therefore, paying proper attention to how inflation expectations form and fluctuate, as well as avoiding simple methods, is necessary in calculating inflation expectations. In this research, an attempt was made to calculate and present data related to this variable in the framework of rational expectations for the period of 1996 to 2021 using the random forest regression method, considering the strengths and weaknesses of each method of mapping inflation expectations. Subsequently, after learning the random forest-based model, by conducting an in-sample prediction, the data were extracted and the features related to rational expectations regarding these data were examined.
Findings
The coefficient of determination value for the test data was found to be 80%, indicating that, on average, 80% of inflation variations are correctly predicted by economic factors using the model inputs or features. Based on this and by examining the features related to estimation residuals, it was determined that economic factors in predicting inflation do not exhibit systematic errors and, with a sufficiently large time interval and having an adequate information set, can have a proper understanding of inflation behavior. Moreover, the results of comparing inflation expectations based on random forest regression-based predictions show superiority of this approach compared to competing methods such as the Hodrick-Prescott filter. After that, the importance of each of the factors in the basket of information related to inflation expectations was ranked. It should be noted that the selection of features for predicting inflation expectations was not based on the direct attention of households and economic factors to these features. Rather, economic factors and households may find the effect of these features in other evidence. For example, the effect of an increase in the exchange rate on the prices of goods that are somehow related to this variable may be apparent to households, and fundamentally, the prevalent interpretation of rational expectations in the literature of this field is based on this approach. The results of this ranking indicate that among the entire information set, factors such as inflation breaks, exchange rates, and economic sanctions had the highest importance in shaping inflation expectations.
Discussion and Conclusion
It is worth mentioning that inflation breaks have been identified as the most important factor among the entire information set as a manifestation of the adaptive section of inflation expectations. However, this does not mean that expectations are entirely adaptive. Based on the research findings, it is clear that if economic factors rely solely on the adaptive section to predict inflation, zero estimation error, unpredictability of errors, and consequently the formation of rational expectations will not be achieved. Using a combination of three approaches: gradient boosting algorithm, random forest algorithm, and linear regression, a voting regression was also performed, showing a 3% improvement in determination coefficient compared to random forest (83%). Moreover, other results, such as the order and intensity of feature importance, and predicted inflation values, are similar to the random forest method with slight variations which means, estimating rational expectations is reliable
Measurement and examination of unobservable variables directly such as inflation expectations or potential output, is really challenging. Inflation expectations have been considered a key variable in many macroeconomic models, particularly in the realm of monetary economics. Macroeconomic models assume that economic agents make consumption, savings, and labor market decisions based on their perception of future inflation levels, and these decisions play a great role in realizing economic variables, including inflation. The role of inflation expectations differs from other inflation-generating factors. While factors such as money supply, budget deficit, exchange rate, and to some extent, economic sanctions can be considered as policy tools. Inflation expectations normally result from the interaction of other factors and may potentially predict future inflation. For example, an increase in the budget deficit, if not addressed independently by the Central Bank, can lead to an increase in money supply, inflation, and intensification of inflation expectations. Thus, inflation expectations can be considered as a variable that evolves within society and changes due to other inflation-generating factors. However, once formed, these expectations themselves become significant factors in inflation and other economic variables. Unlike many countries, in Iran, despite the importance of inflation due to decades of double-digit inflation, no action has been taken to produce and provide survey data related to this variable. However, according to existing literature, comparing the results of alternative methods incorporating inflation expectations with survey data can provide valuable insights. In practice, incorporating inflation expectations can improve the performance of inflation prediction models.
Methodology
Empirical research indicates that methods that consider inflation expectations along with its fluctuations and dynamics outperform models that do not consider these dynamics. Therefore, paying proper attention to how inflation expectations form and fluctuate, as well as avoiding simple methods, is necessary in calculating inflation expectations. In this research, an attempt was made to calculate and present data related to this variable in the framework of rational expectations for the period of 1996 to 2021 using the random forest regression method, considering the strengths and weaknesses of each method of mapping inflation expectations. Subsequently, after learning the random forest-based model, by conducting an in-sample prediction, the data were extracted and the features related to rational expectations regarding these data were examined.
Findings
The coefficient of determination value for the test data was found to be 80%, indicating that, on average, 80% of inflation variations are correctly predicted by economic factors using the model inputs or features. Based on this and by examining the features related to estimation residuals, it was determined that economic factors in predicting inflation do not exhibit systematic errors and, with a sufficiently large time interval and having an adequate information set, can have a proper understanding of inflation behavior. Moreover, the results of comparing inflation expectations based on random forest regression-based predictions show superiority of this approach compared to competing methods such as the Hodrick-Prescott filter. After that, the importance of each of the factors in the basket of information related to inflation expectations was ranked. It should be noted that the selection of features for predicting inflation expectations was not based on the direct attention of households and economic factors to these features. Rather, economic factors and households may find the effect of these features in other evidence. For example, the effect of an increase in the exchange rate on the prices of goods that are somehow related to this variable may be apparent to households, and fundamentally, the prevalent interpretation of rational expectations in the literature of this field is based on this approach. The results of this ranking indicate that among the entire information set, factors such as inflation breaks, exchange rates, and economic sanctions had the highest importance in shaping inflation expectations.
Discussion and Conclusion
It is worth mentioning that inflation breaks have been identified as the most important factor among the entire information set as a manifestation of the adaptive section of inflation expectations. However, this does not mean that expectations are entirely adaptive. Based on the research findings, it is clear that if economic factors rely solely on the adaptive section to predict inflation, zero estimation error, unpredictability of errors, and consequently the formation of rational expectations will not be achieved. Using a combination of three approaches: gradient boosting algorithm, random forest algorithm, and linear regression, a voting regression was also performed, showing a 3% improvement in determination coefficient compared to random forest (83%). Moreover, other results, such as the order and intensity of feature importance, and predicted inflation values, are similar to the random forest method with slight variations which means, estimating rational expectations is reliable
Dr Esmaiel Abounoori, Dr Anahita Roozitalab,
Volume 0, Issue 0 (12-2024)
Volume 0, Issue 0 (12-2024)
Abstract
Aim and Introduction
Inequality is a multidimensional phenomenon that affects various aspects of households' lives. The economic well-being of individuals depends not only on their income but also on other factors such as access to healthcare, education, transportation, etc. Therefore, one-dimensional methods (income-focused) are insufficient for measuring inequality. The multidimensional approach to inequality considers different aspects of individual welfare, unlike the one-dimensional approach. The concentration of population and activities in some provinces of Iran, along with macroeconomic indicators (inflation and unemployment), exacerbates inequality. These inequalities affect various dimensions of people's lives and endanger their economic welfare. The primary aim of this study is to examine the effects of inflation and unemployment on multidimensional inequality in the provinces of Iran and their reciprocal effects on each other, using a multidimensional Gini coefficient estimated from the household budget microdata of the Statistical Center of Iran for the years 2000-2021.
Methodology
In this study, the multidimensional Gini coefficient by Kumar Banerjee (2010) has been estimated for 9 dimensions of welfare. Then, the effects of inflation and unemployment, along with variables such as per capita real government expenditure and per capita real financial facilities as indicators of financial development, will be analyzed using a spatial econometric model. The mathematical form of the multidimensional Gini coefficient (MGI) is as follows:
Here, the mathematical formula would be inserted) In this equation: represents the non-increasing rank of the unit under study in the individual's overall welfare vector, and represents the sample size. The range of this index fluctuates between zero (completely equal distribution) and one (completely unequal distribution). For measuring multidimensional inequality in this study, the multidimensional Gini coefficient by Kumar Banerjee (2010) has been used which is based on the microdata from the household expenditure (income) survey of the Statistical Center of Iran and involves data mining processes such as aggregating groups of beverages and tobacco, ready meals with food expenditure groups, and communications with transportation, and extracting data related to each household code in each province using R Studio 2020 software. The model is based on the spatial econometric method with spatial panel data, defined using a proximity method in which provinces sharing a border have an element of one and otherwise zero. The adjacency matrix (spatial weight) is normalized, where neighboring provinces carry the most weight, and distant provinces carry the least.
Findings
The results of estimating the multidimensional Gini coefficient for the provinces during 2000-2021 show that most provinces have experienced a high rate of inequality. Provinces such as Bushehr, Khuzestan, Kermanshah, Kurdistan, Markazi, Qazvin, Qom, Semnan, Sistan and Baluchestan, West Azerbaijan, Zanjan, and Yazd are in an unfavorable condition compared to the country, and most of these provinces are border regions. Over these 22 years, Sistan and Baluchestan with 77.66% have the highest rate of multidimensional inequality, while Isfahan with 60.85% has the lowest among the provinces. Additionally, the findings indicate that inflation, unemployment, per capita real government expenditure, and per capita real disbursed financial facilities have a significant positive effect on multidimensional inequality in the provinces of Iran. The proximity of provinces has also worsened the inequality conditions in the neighboring provinces.
Discussion and Conclusion
Four variables including unemployment, inflation, per capita real government expenditure, and per capita real disbursed financial facilities have a significant positive effect on the multidimensional Gini coefficient, worsening income distribution. The most significant impact is seen with per capita real government expenditure, which is not allocated effectively to enhance welfare and improve economic conditions, thus not improving income distribution and reducing inequality. The effects of the other variables are in the following order: per capita real disbursed financial facilities, unemployment, and inflation. It is recommended to consider all welfare dimensions in the household consumption basket, create equal conditions for access to bank facilities, allocate a specific quota of facilities to lessdeveloped provinces, allocate government expenditures to expand public services and infrastructure in deprived provinces, consider the interactive effects between provinces in policymaking, and implement effective policies to improve welfare conditions and balanced income distribution across all provinces
Inequality is a multidimensional phenomenon that affects various aspects of households' lives. The economic well-being of individuals depends not only on their income but also on other factors such as access to healthcare, education, transportation, etc. Therefore, one-dimensional methods (income-focused) are insufficient for measuring inequality. The multidimensional approach to inequality considers different aspects of individual welfare, unlike the one-dimensional approach. The concentration of population and activities in some provinces of Iran, along with macroeconomic indicators (inflation and unemployment), exacerbates inequality. These inequalities affect various dimensions of people's lives and endanger their economic welfare. The primary aim of this study is to examine the effects of inflation and unemployment on multidimensional inequality in the provinces of Iran and their reciprocal effects on each other, using a multidimensional Gini coefficient estimated from the household budget microdata of the Statistical Center of Iran for the years 2000-2021.
Methodology
In this study, the multidimensional Gini coefficient by Kumar Banerjee (2010) has been estimated for 9 dimensions of welfare. Then, the effects of inflation and unemployment, along with variables such as per capita real government expenditure and per capita real financial facilities as indicators of financial development, will be analyzed using a spatial econometric model. The mathematical form of the multidimensional Gini coefficient (MGI) is as follows:
Here, the mathematical formula would be inserted) In this equation: represents the non-increasing rank of the unit under study in the individual's overall welfare vector, and represents the sample size. The range of this index fluctuates between zero (completely equal distribution) and one (completely unequal distribution). For measuring multidimensional inequality in this study, the multidimensional Gini coefficient by Kumar Banerjee (2010) has been used which is based on the microdata from the household expenditure (income) survey of the Statistical Center of Iran and involves data mining processes such as aggregating groups of beverages and tobacco, ready meals with food expenditure groups, and communications with transportation, and extracting data related to each household code in each province using R Studio 2020 software. The model is based on the spatial econometric method with spatial panel data, defined using a proximity method in which provinces sharing a border have an element of one and otherwise zero. The adjacency matrix (spatial weight) is normalized, where neighboring provinces carry the most weight, and distant provinces carry the least.
Findings
The results of estimating the multidimensional Gini coefficient for the provinces during 2000-2021 show that most provinces have experienced a high rate of inequality. Provinces such as Bushehr, Khuzestan, Kermanshah, Kurdistan, Markazi, Qazvin, Qom, Semnan, Sistan and Baluchestan, West Azerbaijan, Zanjan, and Yazd are in an unfavorable condition compared to the country, and most of these provinces are border regions. Over these 22 years, Sistan and Baluchestan with 77.66% have the highest rate of multidimensional inequality, while Isfahan with 60.85% has the lowest among the provinces. Additionally, the findings indicate that inflation, unemployment, per capita real government expenditure, and per capita real disbursed financial facilities have a significant positive effect on multidimensional inequality in the provinces of Iran. The proximity of provinces has also worsened the inequality conditions in the neighboring provinces.
Discussion and Conclusion
Four variables including unemployment, inflation, per capita real government expenditure, and per capita real disbursed financial facilities have a significant positive effect on the multidimensional Gini coefficient, worsening income distribution. The most significant impact is seen with per capita real government expenditure, which is not allocated effectively to enhance welfare and improve economic conditions, thus not improving income distribution and reducing inequality. The effects of the other variables are in the following order: per capita real disbursed financial facilities, unemployment, and inflation. It is recommended to consider all welfare dimensions in the household consumption basket, create equal conditions for access to bank facilities, allocate a specific quota of facilities to lessdeveloped provinces, allocate government expenditures to expand public services and infrastructure in deprived provinces, consider the interactive effects between provinces in policymaking, and implement effective policies to improve welfare conditions and balanced income distribution across all provinces
Mrs Zhila Saleki, Dr Reza Ranjpour, Dr Elham Nobahar,
Volume 0, Issue 0 (12-2024)
Volume 0, Issue 0 (12-2024)
Abstract
Aim and Introduction
The central bank operates by setting an inflation target and implementing monetary policies to achieve its economic goals. The accurate estimation and calculation of actual inflation in society are crucial for establishing the correct inflation target. Any discrepancy between the set inflation target and real inflation can disrupt the central bank's policy-making. If the actual inflation differs from the inflation perceived by society, it can further complicate the central bank's decision-making process.
Society's perception of inflation, as reflected in inflation expectations, refers to consumers' personal feelings and assessments of the rate at which market prices are rising. This perception is often associated with an increase in the cost of living, products, and services, as well as a decrease in the standard of living. Criticisms have been raised regarding the rationality of individuals when estimating inflation rates. Carroll's epidemiological model (2001) posits that individuals form their expectations of future inflation based on the information they receive, such as expert forecasts published in articles. Those who do not encounter such articles may rely on previous inflation statistics and forecasts they have come across.
Initially, the influence of the media on society's perception of inflation was considered. Subsequent developments in this theory led to the identification of various experimental factors from different societal studies that can impact this perception. It is crucially important to note that factors other than those involved in the calculation of the inflation rate can also influence this index.
Methodology
This study investigates inflation perception through both qualitative and quantitative approaches and explores its relationship with potential influencing factors. The Consumer Inflation Expectations Index quantifies the percentage by which consumers anticipate prices of goods and services to fluctuate over the next 12 months. The index is constructed by developing a questionnaire that reflects the socio-economic conditions of the countries under study. The questionnaire encompasses various inquiries pertaining to past experiences of price changes, personal financial circumstances, business conditions, purchasing power, expectations regarding interest rates and inflation, and significant purchasing and saving intentions. Understanding the determinants of perceived inflation is vital for the efficacious implementation of policies within a society. This research was conducted within a comprehensive framework, evaluating a sample of 384 consumers in the city of Tabriz. Participants were selected randomly in November 2023 and consisted of either household heads or family members responsible for a substantial proportion of household expenditures, all aged 15 and older. The causal-comparative method was utilized to analyze the collected data, acknowledging that individual perceptions of inflation may be influenced by variables such as geographical location, gender, level of knowledge and education, performance, attitude, and subjective norms. Some of these variables may be inherent traits that are unchangeable, while others may be external factors beyond the control of the researcher or unethical to manipulate. Furthermore, this method was employed to identify factors associated with unsuccessful policy implementation to prevent their recurrence, as well as to pinpoint and cultivate beneficial factors.
Findings
The survey results from this study indicate that the perceived inflation rate in Tabriz in November 2023 was 70.54%, compared to 50.40% as reported by the Iranian Statistics Center for the same period, showing a discrepancy of approximately 20.14% between the community's perceived inflation rate and the official inflation rate. Additionally, the perceived inflation rate for October 2023 was estimated at 59.80%, which is higher than the official inflation rate of 51.20%. The forecasted perceived inflation rate for December 2023 was also examined, estimated at 57.83%, showing a decreasing trend compared to November's perceived inflation rate. This rate was compared with the official rate of 70.49% reported by the Statistics Center. The significant gap between perceived and official inflation rates confirms the high bias in the perceived inflation rate relative to the official rate and indicates a concurrent movement between the actual inflation rate and the perceived inflation rate. As a result, the impact of expected inflation, derived from perceived inflation, on the official inflation rate is validated. The results also revealed that perceived inflation rates are higher among women, part-time employees, manufacturing workers, unemployed educated individuals, and married people. Factors such as very low knowledge of the concept of inflation and related statistics, incorrect recollection of past prices, the disproportionate effect of frequent purchases, asymmetric perception of price increases and decreases, and household income levels play a significant role in explaining the highest perceptions of inflation rates. Furthermore, individual behaviors in purchasing and consuming goods have led to increased perceptions of inflation. The role of media and social networks in shaping inflation perceptions has been very prominent, with the highest perceived inflation rates attributed to the influence of reports from foreign media. Changes in the gold and currency markets also had the greatest impact on consumers' inflation rate estimates.
Discussion and Conclusion
The achievement of objectives stemming from policy implementation relies heavily on the accurate estimation of the said policies and the factors influencing their execution. This study has revealed that the perceived inflation rate and its influencing factors may deviate from the official inflation rate and its contributing factors. Inaccurate estimations heighten the risk of policy misalignments with predetermined goals. It is therefore imperative that estimating the perceived inflation rate and its influencing factors falls within the purview of executing centers and is factored into the planning of societal policies as a whole
The central bank operates by setting an inflation target and implementing monetary policies to achieve its economic goals. The accurate estimation and calculation of actual inflation in society are crucial for establishing the correct inflation target. Any discrepancy between the set inflation target and real inflation can disrupt the central bank's policy-making. If the actual inflation differs from the inflation perceived by society, it can further complicate the central bank's decision-making process.
Society's perception of inflation, as reflected in inflation expectations, refers to consumers' personal feelings and assessments of the rate at which market prices are rising. This perception is often associated with an increase in the cost of living, products, and services, as well as a decrease in the standard of living. Criticisms have been raised regarding the rationality of individuals when estimating inflation rates. Carroll's epidemiological model (2001) posits that individuals form their expectations of future inflation based on the information they receive, such as expert forecasts published in articles. Those who do not encounter such articles may rely on previous inflation statistics and forecasts they have come across.
Initially, the influence of the media on society's perception of inflation was considered. Subsequent developments in this theory led to the identification of various experimental factors from different societal studies that can impact this perception. It is crucially important to note that factors other than those involved in the calculation of the inflation rate can also influence this index.
Methodology
This study investigates inflation perception through both qualitative and quantitative approaches and explores its relationship with potential influencing factors. The Consumer Inflation Expectations Index quantifies the percentage by which consumers anticipate prices of goods and services to fluctuate over the next 12 months. The index is constructed by developing a questionnaire that reflects the socio-economic conditions of the countries under study. The questionnaire encompasses various inquiries pertaining to past experiences of price changes, personal financial circumstances, business conditions, purchasing power, expectations regarding interest rates and inflation, and significant purchasing and saving intentions. Understanding the determinants of perceived inflation is vital for the efficacious implementation of policies within a society. This research was conducted within a comprehensive framework, evaluating a sample of 384 consumers in the city of Tabriz. Participants were selected randomly in November 2023 and consisted of either household heads or family members responsible for a substantial proportion of household expenditures, all aged 15 and older. The causal-comparative method was utilized to analyze the collected data, acknowledging that individual perceptions of inflation may be influenced by variables such as geographical location, gender, level of knowledge and education, performance, attitude, and subjective norms. Some of these variables may be inherent traits that are unchangeable, while others may be external factors beyond the control of the researcher or unethical to manipulate. Furthermore, this method was employed to identify factors associated with unsuccessful policy implementation to prevent their recurrence, as well as to pinpoint and cultivate beneficial factors.
Findings
The survey results from this study indicate that the perceived inflation rate in Tabriz in November 2023 was 70.54%, compared to 50.40% as reported by the Iranian Statistics Center for the same period, showing a discrepancy of approximately 20.14% between the community's perceived inflation rate and the official inflation rate. Additionally, the perceived inflation rate for October 2023 was estimated at 59.80%, which is higher than the official inflation rate of 51.20%. The forecasted perceived inflation rate for December 2023 was also examined, estimated at 57.83%, showing a decreasing trend compared to November's perceived inflation rate. This rate was compared with the official rate of 70.49% reported by the Statistics Center. The significant gap between perceived and official inflation rates confirms the high bias in the perceived inflation rate relative to the official rate and indicates a concurrent movement between the actual inflation rate and the perceived inflation rate. As a result, the impact of expected inflation, derived from perceived inflation, on the official inflation rate is validated. The results also revealed that perceived inflation rates are higher among women, part-time employees, manufacturing workers, unemployed educated individuals, and married people. Factors such as very low knowledge of the concept of inflation and related statistics, incorrect recollection of past prices, the disproportionate effect of frequent purchases, asymmetric perception of price increases and decreases, and household income levels play a significant role in explaining the highest perceptions of inflation rates. Furthermore, individual behaviors in purchasing and consuming goods have led to increased perceptions of inflation. The role of media and social networks in shaping inflation perceptions has been very prominent, with the highest perceived inflation rates attributed to the influence of reports from foreign media. Changes in the gold and currency markets also had the greatest impact on consumers' inflation rate estimates.
Discussion and Conclusion
The achievement of objectives stemming from policy implementation relies heavily on the accurate estimation of the said policies and the factors influencing their execution. This study has revealed that the perceived inflation rate and its influencing factors may deviate from the official inflation rate and its contributing factors. Inaccurate estimations heighten the risk of policy misalignments with predetermined goals. It is therefore imperative that estimating the perceived inflation rate and its influencing factors falls within the purview of executing centers and is factored into the planning of societal policies as a whole
Volume 5, Issue 4 (12-2001)
Abstract
Mohammad Jafar Habibzadeh Associate Professor, Department of Law, Tarbiat Modares University Ali Hossein Najafi Abrand Abadi Associate Professor, Department of Law, Shahid Beheshti University Kiomarth Kalantary Ph.D. Student of Criminal Law, Tarbiat Modares University Although the penal law is a necessity for a society, the consequences of its approval and execusion can not be overlooked. This is because, every penal law, with all it's advantages, limits people's freedom and increases the power of the State, which results in the vulnerability of the people against the government human beings, by nature, like to have freedom without limitation, Whereas in a social system the state allows people to enforce their freedom within the established limits, if criminal laws , are not of the right qualifications and if they are in congruent With the natural rights of human beings, clashes between the people and the government will be inevitable. To solve this problem, a criminal sanction should be chosen as the final solution. Notwithstanding this, today the legislator in Iran passes numerous penal laws without paying attention to their efficiency and consequences. More specifically, the legislator has passed more than 245 substative penal laws from 1358 (1979) to 1378( 1999) and if we add jurisprudences issued by the Supreme court and the provisions ratified by Cultural Revolution High Counsil regarding the criminal regulations, the quantity will be even greater. Therefore, this paper attempts to discuss overcriminalisation, its causes and its consequences in Iranian legal system.
Seyyed Safdar Hosseini, Toktam Mohtashami,
Volume 8, Issue 3 (10-2008)
Volume 8, Issue 3 (10-2008)
Abstract
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.
, Majid Aghaei, Mohammad Rezaeepour,
Volume 9, Issue 1 (4-2009)
Volume 9, Issue 1 (4-2009)
Abstract
Exchange rate and inflation rate consistently affect stock price and the return on stocks. Since such effects could impact income distribution, it is important to study such issue carefully. In this paper an attempt is made to study the impact of exchange rate and inflation rate on the real returns as well as the stock price index in Tehran stock market. In this paper, we use a vector autoregreesion (VAR) model as well a vector error correction model (VECM) to examine the relationship among variables. This study uses monthly data from 1983M4 through 2007M3. The results indicate that there exists a stable long–run relationship among the variables included in the model. Exchange rate and inflation rate positively affect the real rate of stock return. However, the impact of inflation rate is stronger than the impact of the exchange rate.
Volume 9, Issue 3 (10-2005)
Abstract
According to the additional clause (1997) of Article 1082 in Iranian Civil Code and drawing upon the new legal form of observation of inflation indices, the Mahr can be estimated in terms of the current rate. Of course this form is different from other justifications such as delayed payment penalty and stipulations. This distinction is shown by introducing and comparing these forms together. In the same way estimating Mahr in terms of the current rate needs fulfilling some formal and essential legal conditions which are discussed in this paper as the main aim of the present article. So, a number of vage issues and questions are raised and efforts are made to explain and answer them according to the legal historical ground, theoretical foundation and general rules of interpretation of laws.
Ebrahim Hosseini Nasab, Mahdieh Rezagholizadeh,
Volume 10, Issue 1 (5-2010)
Volume 10, Issue 1 (5-2010)
Abstract
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.
Ali Mohammad Ahmadi, Mehdi Yousefi, Somayeh Fazaeli,
Volume 10, Issue 1 (5-2010)
Volume 10, Issue 1 (5-2010)
Abstract
One of the major macroeconomic objectives of the governments is to control the inflation rate. High inflation and its associate destructive impacts on public welfare are concerned by social and economic policymakers. Consequently, they aim to control the inflation rate. Inflation within health sector is attributed to various factors including aging population, insurance problems such as imperfect coverage and maladministration, lower productivity of production factors mainly medical staff and equipments, technological variation in delivering medical services, population growth and the lack of symmetric information among the suppliers and the demanders of health services. The findings of this study show that the resulting inflation rate for health sector is relatively higher than the overall CPI inflation in Iran. To achieve a better understanding of inflation process in the Iranian health sector, in addition to the above factors, other issues should be considered. They include the effects of technological development, the existence of a verity of formal and informal fees in private sector, the role of non governmental Organizations (NGO) in setting medical and paramedical fees.
Khosro Piraee, Bahareh Dadvar,
Volume 11, Issue 1 (5-2011)
Volume 11, Issue 1 (5-2011)
Abstract
Hyper inflation rates impose direct and indirect costs upon society. It has undesirable consequences that are caused by inflation uncertainty. In this regard, the following questions are raised: How do inflation rate and its uncertainty affect economic growth? Does the structural breakpoint affect relationship between inflation and growth rate? In this study the above questions are examined for the Iran's economy in period 1974-2007. For this purpose the regressive model is applied. In this model, growth rate of GDP depends on inflation rate, growth rate of the money supply, growth rate of the real gross fixed capital formation and inflation uncertainty. For the measuring inflation uncertainty Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model is used. Based on data analysis, structural break point occurs at inflation rate equal to 20 percent. Results show that the impact of inflation rate on economic growth is significantly negative but it minimizes at the rate of less than 20 percent and increases at the rate of more than 20 percent. Moreover, inflation uncertainty has significant and negative effect on growth.
Sohrab Delangizan, Kiomars Sohaili, Elaha Khalooei,
Volume 11, Issue 1 (5-2011)
Volume 11, Issue 1 (5-2011)
Abstract
By a transient glance at the Iranian government budget, it is found that in almost all years, a large amount of the Iranian government budget deficit is provided by issuing money. Money issuing through inflation and real economic growth, leads to increased revenue for the government. Through increasing the general level of prices and decreasing the purchasing power it leads to the concept of “inflation tax” which is taken from people without their awareness. By real economic growth, more real balance will be demanded for transaction of additional production. In such a condition, the government by paying credit money takes the possession of the goods and services which have inherent value. Regarding the importance of growth in macroeconomic discussions, in this study, the relationship between seigniorage and per capita income growth by using econometrics models has been analyzed. Using time series data for 1966 – 2007 the econometric models have been estimated through CLS approach and threshold level of seigniorage is assessed. The results show that seigniorage has meaningful and negative effect on the economic growth at more than 3.5% but its effect on economic growth less than 3.5% is neutral.
Volume 11, Issue 3 (10-2007)
Abstract
Little effort has been exerted in the domain of the study of the relation between age structure of population with macroeconomic variables and the study of its effects on the economy of Iran. According to Life Cycle Theory, middle-age groups are owners of savings and young and old-age groups are consumers (their consumption is more than their savings). Wicksell’s cumulative Inflation Process Theory, founded on the resolutions of saving and investment, also foresees that the surplus of the demand raised from the difference in interest rate would contribute to the surplus of consumption which would cause, in turn, demand pressure and finally would result to more inflation. The presernt study is a document-experiment research and combining the above mentioned two theories, tries to analyze the effects of the age distribution of the population on inflation in the Iran, using estimation in OLS method. The findings of the research showed that the consuming age groups i.e. the ages between 0 – 14 years, 15 - 19 years, and over 64 years have a meaningful positive effect on the inflation, while saving age groups i.e. ages between 30 - 44 and 45 - 64 years have a meaningful negative effect on the inflation. The population limiting policy which has been exerted since 1989 has also had a meaningful negative effect on the inflation in Iran.
Karim Emami, Mitra Olia,
Volume 12, Issue 1 (5-2012)
Volume 12, Issue 1 (5-2012)
Abstract
The purpose of this paper is estimating output gap as one of the variables that affect inflation in the Iranian economy. Therefore, using seasonal data from spring 1989 to winter 2006 and through Hodrick-Prescott filtering techniques the potential output and output gap are estimated and then ordinary least squares approach has been used to find out the relationship between inflation and output gap. Variables such as exchange rates, price index of imported goods, and the adjusted output gap as real variables and expected future inflation have been used for estimating the model considering the facts and theories in the Iranian economy. This test has been done through the rational expectation hypothesis of an enterprise and using a new Keynesian Phillips curve. The research findings verify the new Keynesian opinion. Thus, in Iran where the average rate of inflation in the period, is 19.6% and therefore considered among the countries with galloping rate of inflation, Phillips curve has been estimated with a relatively steep slope. In the long run, the steep Phillips curve according to Keynesians implies that in case of demand shock, the production will increase and compared with the new classic models it has less impact on inflation.
Firouzeh Azizi, Hassan Khodavaisi, Fatemeh Johari,
Volume 12, Issue 2 (7-2012)
Volume 12, Issue 2 (7-2012)
Abstract
In Economics literature many studies tried to examine whether stocks are perfect hedge against inflation. The answer is not conclusive. In this paper, using data from Tehran stock market, the relationship between inflation and stock returns during April 1991 till March 2009 is reexamined. The empirical results have shown that Fisher Hypothesis, which asserts that stocks are perfect hedge against inflation, has been rejected and also it is revealed that stocks are a weak hedge against inflation in Tehran stock market. Fama has already tried to explain why Fisher hypothesis did not hold in some situations. In this paper Fama hypothesis is examined and it is found out that Fama explanation for the rejection of the Fisher hypothesis is hardly acceptable and the negative relationship between inflation and real rate of return of the stocks in Tehran stock market can be attributed to temporary part of the inflation.
Ali Falahati, Kiomars Sohaili, Farzad Noori,
Volume 12, Issue 3 (9-2012)
Volume 12, Issue 3 (9-2012)
Abstract
Achieving a high and sustainable economic growth has always been the main target of economic plans in different countries. Proving a positive relationship between financial development and economic growth by many studies has convinced the researchers to study the effective factors on the growth and development of financial markets. Inflation is one of the main factors that have a great impact on the countries’ financial development. So, the focus in the studies has mainly been on explaining the form of relationship between inflation and financial development. In this paper, the relationship between inflation and financial market development in Iran during 1978 to 2007 for the money market and during the summer of 1999 to spring of 2008 for the capital market has been reviewed. Econometric model of this research has been specified according to Boyd, Levine and Smith model (2001). Firstly, a simple linear model is used for controlling other economic factors that may be correlated with financial market performance. Then, a threshold regression is handled for explaining the nonlinear relationship between inflation and financial market development. In this model, different thresholds that limit inflation are considered. Conditional least squares method (CLS), is applied for estimating the model. The threshold limit for inflation has been determined based on the minimum error sum of squared criterion. The results of the estimated model indicate that a negative relationship between inflation and financial development indexes of money market. This positive relationship also exists between inflation and stock market development indexes. In the same way, the output of the estimated models has shown that in the some domain of inflation, the negative relationship between inflation and financial development indexes of money market is not significant. In addition, the results of the estimated models revealed that there is no a threshold limit for the impact of inflation on the stock market.
Ahmad Molabahrami, Hassan Khodavaisi, Reza Hossaini,
Volume 13, Issue 1 (4-2013)
Volume 13, Issue 1 (4-2013)
Abstract
In this paper, it is tried to propose a robust model for predicting inflation in Iran among alternative models. For doing this, monthly data from April 1990 to the end of September 2009 is used. Firstly, it is tried to determine whether the CPI data is chaotic or stochastic. It is shown that it is chaotic rather than stochastic. Therefore, it is predictable. Then, a stochastic differential equation model is estimated (specifically a geometric Brownian motion) for CPI in Iran. In order to compare the prediction power of the model other alternative models of prediction like ARMA, non-linear GARCH, EGARCH, TGARCH are also used to extrapolate inflation during a six month prediction period. Based on RMSE, MAE, U-Tail, it is revealed that stochastic differential equation model is much more robust than the alternative models mentioned above.
Kazem Farahmand Gelyan, Nasser Shahnoushi,
Volume 13, Issue 2 (7-2013)
Volume 13, Issue 2 (7-2013)
Abstract
Today, policymakers and economists use widely rational expectations (RE) in monetary, financial and regulatory policies to improve their country economic performance. In some of the pertinent models to these policies, expectations have been formed by assuming rationality and full information on economics. Indeed, economic agents have no perfect information about some parameters of these models. These unknown parameters can be estimated in the form rational expectations during learning process. In this research, the impact of government policies on the inflation rate has been modeled on the basis of rational expectations under learning process. Data has been gathered from Central Bank of Iran (CBI) and Iran’s economic development plans over the period 1989-2009. Results show that current inflation in the country originates mainly from economy structure and government policies, so share of public inflationary expectations is negligible. In addition, the learning process in Iran will converge to rational expectations, thus government policies for reducing inflation and increasing employment are inefficient. It is recommended that government adopt unanticipated and sudden policies to be effective its plans.
Abbas Shakeri, Esfandyar Jahangard, Somayyeh Aghlami,
Volume 13, Issue 4 (1-2014)
Volume 13, Issue 4 (1-2014)
Abstract
In the economic literature, inflation is one of the most important factors influencing income inequality. Since Iran as a developing country has frequently been facing with high and volatile inflation rates, the study of the effect of inflation on income inequality is of considerable importance. Despite the importance of the issue, the few studies that have dealt with this subject have not derived same result, so the effect of inflation on income inequality remains paradoxical. However, the economic studies in recent decades confirm the nonlinear relationship between inflation and income inequality. Inspired by these studies, we investigate the nonlinear effect of inflation on income inequality during 1971-2006. Likewise, we examine the Granger causality relationship between inflation and income inequality by using “Toda & Yamamoto” and “Error correction” procedures during 1971-2007.
Volume 13, Issue 6 (3-2022)
Abstract
Cognitive-critical discourse analysis approaches can lead us to figure out how financial problems can be caused verbally. The main purpose of this article is to investigate the recent economic crisis in Iran through Norman Fairclough model (1989). A text produced on february 26, 2012 by Mahoud Bahmani, the governor of the central bank of the 10th administration was analyzed by means of persuasive tools linguistically. Then, a comparison was done between the rate of the dollar before and after his speech. The result indicated that the economic actors in charge of power, by means of persuasion, can target the mind of people and make them excited to exchange their capitals into dollar, bringing inflation expectations to happen. Data in this research was chosen from five initial sentences of a text from “asre Iran” under code no. 195709. This text was analyzed from three dimentions: description, interpretation, and explanation.
1. Introduction
1. Introduction
This article will examine the living conditions of people through investigating a text produced by an economic actor causing inflation expectation. The results of this research will help the country and people in order to make better decisions in society. The main issue of this research is the description of the current economic problems in the society, which can be caused by the weakness of management in the type of discourse in terms of the linguistic constructions of economic actors who may influence people's attitudes from the position of power with the tools of persuasion. We will investigate this issue borrowing Norman Fairclough’s approach (1989). The question is to figure out which category of economic actors can have an effect on people's cognition (mind) and how? Those economic actors who are equipped with the power mechanism can play a significant role in stimulating people's minds with the help of persuasive tools in discourse. The selection of data is based on the beginning of currency fluctuations after the issue of this text.
2. Literature Review
In recent years, many researches have been conducted on the approach of critical discourse analysis and many books and articles have been published. For example, Khadim et al. (2016) extracted the metaphors of 600 political and social articles with a cognitive-critical approach, examining the way of using the metaphors of power, anti-power and their interactions with the process of persuasion. In this article, Khadim et al. showed how people legitimize their own discourse and delegitimize the rival discourse through mental concepts. The similarity of the work in this article with the present article can be in the application of the process of persuasion through cognition. Zairi et al. (2016) have studied the strategies of language usage in court discourse to investigate the types of persuasion methods of lawyers in Iranian criminal courts in order to convince judges. The research data has been collected from twenty public sessions of Shiraz city court, which aims to answer the question of how activists use linguistic knowledge (syntax, semantics, pragmatics, etc.) and meta-linguistics to achieve the goal of persuading each other. In this research, it was discovered that by hiding and removing the active and passive from the sentence, and turning the known sentence into unknown, lawyers try to create a positive or negative attitude in the mind of the judge by downplaying and hiding some facts from the eyes of the judge regarding the crime that occurred, which can lead to the persuasion of the judge. Zairi et al.'s research is similar to the current study in the use of persuasion tools in discourse.
3.Methodology
The method in this research is a qualitative analysis and discourse analysis type, which has been done emphasizing on the content analysis of the economic text to show the role of language along with the tool of persuasion as well as the power mechanism in creating inflation and inflation expectations in society.
4. Results
After analyzing this text from the Governor of the Central Bank, it was achieved that language is not only a tool for processing and transmitting information, but it is a constructional group of meaningful categories to help the audience process the cognitive dimensions of Bahmani's message by comparing what they have in their mind from old experiences about economy, society, expensiveness, cheapness, profit, etc. and start trying new experiences. This article could be the first research in the field of economic discourse order and economic text analysis in the framework of critical-cognitive discourse analysis, which emphasizes the effect of language on the audience's mind. The inflation expectation we see in the economy of today's society can be due to the text produced by the head of the central bank of the 10th government, by enoucraging inflation in the framework of his ideology to keep the rate of dollar fixed with persuasive tools, stimulating people's mind and making them buy dollars and sell at a higher price.
In this research, according to the following model, adapted from Fairclough, we examined the relationship between language and inflation from the perspective of linguistics and interaction, and analyzed the economic text in three dimensions: description, interpretation, and explanation. The effect of language on exchange rate for dollar was investigated in three levels as social, institutional, and situational. In this model, the concept of economic text/language deals with linguistic concepts in the economic text. The concept of economic discourse order deals with economic issues with a discursive approach to create order in the economic text, and finally, the concept of socio-economic behavior which covers the previous two concepts, examines people's understanding of the interpretation of meaning in society in terms of behavior.
Conceptual model
Text explanation through Fairclough model in 3 levels: social, institutional & situational
Conceptual model
Text explanation through Fairclough model in 3 levels: social, institutional & situational
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Socio-economic behavior
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Economic discourse order
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Economic text
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5. Discussion
It is suggested that economic actors persuade people in such a way that both are equal without any of them having a superiority over the other. In this way, an interactive relationship is established between them. Economic actors can use modals in their text and speech such as: “maybe…, it is possible…., perhaps…”, when they are uncertain about an idea.
6. Conclusion
The economic actors equipped with power mechanism should take care of their speech, for they can stimulate people's minds and make them excited by means of persuasive tools, to change their capitals into dollar and sell them at a higher price later. This phenomenon brings inflation expectation to happen which can cause prices to increase.
The result showed that the economic text which could lead to the creation of economic stability or economic crisis, has resulted in inflation expectations.