منحنی فیلیپس نیوکینزی و درجه عبور نرخ ارز در اقتصاد ایران: شواهدی جدید از الگوی MCWT

New Keynesian Phillips curve and exchange rate pass-through in Iran's economy: New evidence from the MCWT Model

Soheil Roudari, Farzaneh Ahmadian- Yazdi, Ehsan Namazizadeh and Hamidreza Maghsoodi

MPRA Paper from University Library of Munich, Germany

Abstract: Numerous studies have been conducted to explore the relationship between unemployment, inflation expectations, exchange rates, and inflation. However, the connection among these factors remains ambiguous, especially in the context of Iran's economy, where the macroeconomic structure and geopolitical situation significantly heighten its importance. In this research, the dynamics of the New Keynesian Phillips Curve, considering the exchange rate, are analyzed over the period from Q1 2000 to Q4 2022 on a seasonal frequency using a Multivariate Continuous Wavelet Transform (MCWT) model across different frequencies (short-term, medium-term, and long-term). According to the findings of this study, the structure of the Phillips Curve does not align with the realities of Iran's economy. Even during periods of economic recession and expansion, a significant relationship between inflation and unemployment is sometimes absent, even in the short term. However, inflation is primarily influenced by inflation expectations and, to a lesser extent, by the exchange rate in the medium and long term. This indicates that if expectations and exchange rates are not managed, they could lead to persistent long-term inflation. Furthermore, due to price stickiness, even with successful management of exchange rates and expectations, a significant reduction in prices may remain elusive.

Keywords: Inflation; Unemployment; Inflationary Expectations; Exchange rate; MCWT model (search for similar items in EconPapers)
JEL-codes: C65 E12 E31 (search for similar items in EconPapers)
Date: 2024-06-17
New Economics Papers: this item is included in nep-ara
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/126958/1/MPRA_paper_126958.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:126958

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().