Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran
Understanding the nature of the causal relationship among economic variables is crucial for the economic policy-makers and planners. So, this study investigates Granger causality between producer price index (PPI) and consumer price index (CPI) for the economy of Iran. From a policy-making point of...
| Main Authors: | , , |
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| Format: | Article |
| Language: | fas |
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Tarbiat Modares University
2016-05-01
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| Series: | پژوهشهای اقتصادی |
| Subjects: | |
| Online Access: | http://ecor.modares.ac.ir/article-18-10710-en.pdf |
| _version_ | 1797803297016381440 |
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| author | Mohebolah Motahari Mohammad Reza Lotfalipour Shahab Matin |
| author_facet | Mohebolah Motahari Mohammad Reza Lotfalipour Shahab Matin |
| author_sort | Mohebolah Motahari |
| collection | DOAJ |
| description | Understanding the nature of the causal relationship among economic variables is crucial for the economic policy-makers and planners. So, this study investigates Granger causality between producer price index (PPI) and consumer price index (CPI) for the economy of Iran. From a policy-making point of view, the findings of the study may inform economic policy-makers in pursuing effective anti-inflationary policies. To this end, monthly data are used over the period 1990- 2011. The results of the cointegration test indicate that there is a long-run equilibrium relationship between these variables. According to Hsiao test, there is bi-directional causality between consumer price index (CPI) and producer price index (PPI) in both short-run and long-run. Toda and Yamamoto test also indicate the bi-directional causal relationship between the variables. However, it seems that causality from PPI to CPI is stronger than that from CPI to PPI, supporting the Cushing and McGarvey (1990) hypothesis. |
| first_indexed | 2024-03-13T05:18:43Z |
| format | Article |
| id | doaj.art-f4b34d467d964338bfa6d172fee073ef |
| institution | Directory Open Access Journal |
| issn | 1735-6768 2980-7832 |
| language | fas |
| last_indexed | 2024-03-13T05:18:43Z |
| publishDate | 2016-05-01 |
| publisher | Tarbiat Modares University |
| record_format | Article |
| series | پژوهشهای اقتصادی |
| spelling | doaj.art-f4b34d467d964338bfa6d172fee073ef2023-06-15T20:21:44ZfasTarbiat Modares Universityپژوهشهای اقتصادی1735-67682980-78322016-05-01161141164Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of IranMohebolah Motahari0Mohammad Reza Lotfalipour1Shahab Matin2 Ph.D. Candidate in Economics, Ferdowsi University of Mashhad Professor of Economics, Ferdowsi University of Mashhad M.A Student of Economics, Ferdowsi University of Mashhad Understanding the nature of the causal relationship among economic variables is crucial for the economic policy-makers and planners. So, this study investigates Granger causality between producer price index (PPI) and consumer price index (CPI) for the economy of Iran. From a policy-making point of view, the findings of the study may inform economic policy-makers in pursuing effective anti-inflationary policies. To this end, monthly data are used over the period 1990- 2011. The results of the cointegration test indicate that there is a long-run equilibrium relationship between these variables. According to Hsiao test, there is bi-directional causality between consumer price index (CPI) and producer price index (PPI) in both short-run and long-run. Toda and Yamamoto test also indicate the bi-directional causal relationship between the variables. However, it seems that causality from PPI to CPI is stronger than that from CPI to PPI, supporting the Cushing and McGarvey (1990) hypothesis.http://ecor.modares.ac.ir/article-18-10710-en.pdfconsumer price indexproducer price indexcointegrationgranger causalityiran |
| spellingShingle | Mohebolah Motahari Mohammad Reza Lotfalipour Shahab Matin Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran پژوهشهای اقتصادی consumer price index producer price index cointegration granger causality iran |
| title | Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran |
| title_full | Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran |
| title_fullStr | Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran |
| title_full_unstemmed | Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran |
| title_short | Investigating the Causal Relationship between Producer Price Index and Consumer Price Index for the Economy of Iran |
| title_sort | investigating the causal relationship between producer price index and consumer price index for the economy of iran |
| topic | consumer price index producer price index cointegration granger causality iran |
| url | http://ecor.modares.ac.ir/article-18-10710-en.pdf |
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