Document Type : Research Paper

Authors

• Mostafa Sharif ¹
• Seyed Mohammadreza Javan ²

¹ Assistant Professor, Faculty of Economics, Allameh Tabataba`i University,

² MSc in Economics, Unit of Research Scinces of Azad University of Qazvin

Abstract

Many studies have been done about inflation in all developed and developing countries and they have tried to analyze and assess the factors affecting inflation. However, few studies have been done on the causality of inflation. In this study, we have tried to use time series methods to identify different variables that have the greatest impact on inflation in Iran.
The purpose of this paper is to find causal relationships between the imports of consumption, intermediate and capital goods in one hand and inflation on the other hand during the period 1980-2010 in Iranian economy. In this study, we have tried to identify different variables that their time series have the greatest impact on inflation in Iran, Therefore, in this study we have considered the different variables of the consumer price index (inflation rate), liquidity, per capita GNP, free market exchange rate, the adjusted ratio of budget deficit to GDP (BD, GDP), as well as imports of capital, consumption and intermediate goods. In this study, VAR model, error correction model and Granger causality test are used and the resultd confirm one-way and two-way relationship between inflation and and different types of imports.

Keywords

• Granger Causality
• Imports
• Inflation
• Consumption
• Intermediate and Capital Goods