Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran
The distributed lag effect of a unit change in one of the explanatory variables on the dependent variable is one of the major shortcomings of the standard linear egression model. The long run or error correction equation, with specifies a casual relationship between the inflation and its determinant...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2008-09-01
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| Series: | فصلنامه پژوهشهای اقتصادی ایران |
| Subjects: | |
| Online Access: | https://ijer.atu.ac.ir/article_3563_1aea791e8fe779f678fa7c0cc27e024d.pdf |
| _version_ | 1827393288235122688 |
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| author | Ebrahim Hadian Hojat Parsa |
| author_facet | Ebrahim Hadian Hojat Parsa |
| author_sort | Ebrahim Hadian |
| collection | DOAJ |
| description | The distributed lag effect of a unit change in one of the explanatory variables on the dependent variable is one of the major shortcomings of the standard linear egression model. The long run or error correction equation, with specifies a casual relationship between the inflation and its determinants, states that a unit change in one of the explanatory variables can result in a change in the rate of inflation only during the period specified by the model. But in practice, changes in, for example, the country's money supply may affect inflation rate over a long period
This paper aims to estimate the adjustment path of the rate of inflation following exogenous monetary shocks. To do so, we use an ARDL model and time series data for the period 1961-2005 in the Iranian economy. The results indicate that one percent, once-and-for-all, increase in money supply positively affects the rate of inflation during three years. One percent increase in money supply at time t results in 0.42 percent in current period, 0.19 percent at time t+1 and 0.27 percent at time t+2 increase in the rate of inflation. |
| first_indexed | 2024-03-08T17:46:11Z |
| format | Article |
| id | doaj.art-a05ec5ccbffe475a93f1fae1af9b353f |
| institution | Directory Open Access Journal |
| issn | 1726-0728 2476-6445 |
| language | fas |
| last_indexed | 2024-03-08T17:46:11Z |
| publishDate | 2008-09-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | فصلنامه پژوهشهای اقتصادی ایران |
| spelling | doaj.art-a05ec5ccbffe475a93f1fae1af9b353f2024-01-02T10:28:22ZfasAllameh Tabataba'i University Pressفصلنامه پژوهشهای اقتصادی ایران1726-07282476-64452008-09-0112361163563Distributed Lag Effect of Money Changes on the Rate of Inflation in IranEbrahim Hadian0Hojat Parsa1Assistant Professor,Department of Economics, Shiraz UniversityM A in EconomicsThe distributed lag effect of a unit change in one of the explanatory variables on the dependent variable is one of the major shortcomings of the standard linear egression model. The long run or error correction equation, with specifies a casual relationship between the inflation and its determinants, states that a unit change in one of the explanatory variables can result in a change in the rate of inflation only during the period specified by the model. But in practice, changes in, for example, the country's money supply may affect inflation rate over a long period This paper aims to estimate the adjustment path of the rate of inflation following exogenous monetary shocks. To do so, we use an ARDL model and time series data for the period 1961-2005 in the Iranian economy. The results indicate that one percent, once-and-for-all, increase in money supply positively affects the rate of inflation during three years. One percent increase in money supply at time t results in 0.42 percent in current period, 0.19 percent at time t+1 and 0.27 percent at time t+2 increase in the rate of inflation.https://ijer.atu.ac.ir/article_3563_1aea791e8fe779f678fa7c0cc27e024d.pdfinflationardldistributed lag |
| spellingShingle | Ebrahim Hadian Hojat Parsa Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran فصلنامه پژوهشهای اقتصادی ایران inflation ardl distributed lag |
| title | Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran |
| title_full | Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran |
| title_fullStr | Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran |
| title_full_unstemmed | Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran |
| title_short | Distributed Lag Effect of Money Changes on the Rate of Inflation in Iran |
| title_sort | distributed lag effect of money changes on the rate of inflation in iran |
| topic | inflation ardl distributed lag |
| url | https://ijer.atu.ac.ir/article_3563_1aea791e8fe779f678fa7c0cc27e024d.pdf |
| work_keys_str_mv | AT ebrahimhadian distributedlageffectofmoneychangesontherateofinflationiniran AT hojatparsa distributedlageffectofmoneychangesontherateofinflationiniran |