تورم، نرخ ارز، مخارج دولت و نقدینگی: اثرپذیر یا اثرگذار؟ شواهدی جدید از رویکرد TVP-VAR-SV

Inflation, Exchange Rate, Government Spending, and Liquidity: Effect to or Effect from?New Evidence of TVP-VAR-SV

Soheil Roudari, Hamidreza Maghsoodi and Farzaneh Ahmadian- Yazdi

MPRA Paper from University Library of Munich, Germany

Abstract: One of the most important problems of Iran’s economy in recent decades is related to inflation and identifying its impacts and effectiveness from its determinants. Therefore, the current research investigates the interrelationship between inflation, exchange rate, current and construction expenditure of the government, and liquidity during 1384:1-1401:4 with seasonal frequency and using the TVP-VAR-SV model. The results show that increasing liquidity concerning covering the purchasing power, increasing social capital, and preventing speculative activities in the asset market is rational. On the other hand, in the current situation, it is better to not remove the subsidy of other basic commodities because it magnifies the results of the increase in current expenses and liquidity on inflation. The other critical point is the passive characteristic of liquidity in Iran’s economy. The result of its impact and effectiveness from other under-estimated indices shows that its impact is lower than its effectiveness from them. As a result, in such a situation, the implementation of a contractionary monetary policy by the central bank cannot be successful to reduce the inflation rate.

Keywords: Inflation; Exchange Rate; Government Current Expenditure; Government Construction Expenditure; Liquidity (search for similar items in EconPapers)
JEL-codes: C32 E12 J21 (search for similar items in EconPapers)
Date: 2024-04-17
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