Macroeconomics
Abdorasoul Sadeghi; Hossein Marzban; Ali Hossein Samadi; Karim Azarbaiejani
Abstract
The unstable state of macroeconomic indicators such as gross domestic product (GDP), investment, and inflation rate, as well as the disproportionate level of high volume of cash held by private individuals versus the low volume of liquidity in manufacturing firms, have always been a significant problem ...
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The unstable state of macroeconomic indicators such as gross domestic product (GDP), investment, and inflation rate, as well as the disproportionate level of high volume of cash held by private individuals versus the low volume of liquidity in manufacturing firms, have always been a significant problem in Iran's economy. In this respect, the relationship among the stock market, bank deposits, and speculation in the foreign exchange market, and also, the central bank's role in directing liquidity between them to affect the macroeconomic indicators are important. The current study evaluates this subject for 1988–2018 using a system of simultaneous equations and the three-stage least squares (3SLS) method. The findings indicate that there has been a significant negative relationship among the stock market, bank deposits, and foreign exchange speculation. The stock market and bank deposits have had a significant positive effect on investment and GDP, and in contrast, foreign exchange speculation has shown a significant negative impact. Conversely, bank deposits have negatively impacted the consumer price index (CPI), whereas foreign exchange speculation has shown a substantial direct effect. Finally, despite the existence of a significant negative relationship between three financial markets in the Iranian economy confirmed by the obtained results, the central bank has forfeited a considerable portion of its potential effectiveness in directing liquidity between parallel financial markets to affect nominal and real economic indicators due to interest rate repression.
Abdorasoul Sadeghi; Seyed Komail Tayebi
Abstract
Due to the historical importance of inflation in the Iranian economy and its serious effects on the society, the present study has explored the impacts of international sanctions and other effective factors on the inflation rate in Iran during 1981-2014. To this end, this paper has specified an econometric ...
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Due to the historical importance of inflation in the Iranian economy and its serious effects on the society, the present study has explored the impacts of international sanctions and other effective factors on the inflation rate in Iran during 1981-2014. To this end, this paper has specified an econometric model of inflation rate, which has been estimated by the ARDL method using relevant time series data including the above period. The empirical results obtained indicate that the international sanctions have had direct and significant effects on the inflation rate through changes in exchange rate and budget deficit. Additionally, exchange rate, money liquidity and deposit interest rate have had positive and significant effects on the inflation rate, while oil revenues and tax earnings have influenced indirectly and significantly Iran’s inflation rate over the period.