Document Type : Research Paper
Authors
1 Department of Business Economics , Faculty of Economics , Allameh Tabatabai University
2 Faculty of Economics, Allameh Tabataba'i University
3 MA in Economics, Allameh Tabataba'i University
Abstract
Despite, the measures for improvement of the State budget system in the current economic situation in Iran, no improvement has been taken. As, the relationship between beneficiaries of the budget included the government, parliament, regulatory bodies, and people as the final beneficiary of budget, has not regulated properly, therefore, transparency and accountability of the various officials of the government has been decreased. In this paper, we study budgetary and off-budgetary operation of the government and its impact on inflation with emphasis on fiscal dominance via banking system, using Generalized Methods of the Moments (GMM) trough 1372-1397. The results indicate that increasing the fiscal dominance via the debt channel of banking system has positive effect on inflation thus, fiscal dominance via banking system has been proved. Also, the results confirm the negative relationship between political stability and control of corruption on inflation. This variable has been in a low level during the sample period which requires the attention of government in all areas and political factions of country.
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