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Does Inflation Harm Economic Growth in Iran

Author

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  • Mohsen Mehrara

    (Assistant professor, university of Tehran, Department of Economics, Iran. Email address)

Abstract

This paper explores the relation between inflation and economic growth in Iran using annual data for the period 1959-2004 to check whether this relation has a structural breakpoint effect. The results indicate the threshold level of inflation above which inflation significantly slows growth is around 9-12 percent for Iran economy. This range is not surprising, given that it is not possible for the monetary authority to increase or adjust the nominal interest rate above the inflation rate.

Suggested Citation

  • Mohsen Mehrara, 2007. "Does Inflation Harm Economic Growth in Iran," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 12(3), pages 43-56, fall & wi.
    • Handle: RePEc:eut:journl:v:12:y:2007:i:3:p:43
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    File URL: ftp://80.66.179.253/eut/journl/20073-4.pdf
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    References listed on IDEAS

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    1. Robert J. Barro, 2013. "Inflation and Economic Growth," Annals of Economics and Finance, Society for AEF, vol. 14(1), pages 121-144, May.
    2. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    3. Bruno, Michael & Easterly, William, 1998. "Inflation crises and long-run growth," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 3-26, February.
    4. Javier Andrés & Ignacio Hernando, 1999. "Does Inflation Harm Economic Growth? Evidence from the OECD," NBER Chapters, in: The Costs and Benefits of Price Stability, pages 315-348, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Adeniyi, Oluwatosin & Adekunle, Wasiu & Orekoya, Samuel, 2018. "Non-linear Relation between External Debt and Economic Growth in Nigeria: Does the Investment Channel Matter?," MPRA Paper 99975, University Library of Munich, Germany, revised 07 Apr 2019.
    2. Ahmad, Najid & Du, Liangsheng, 2017. "Effects of energy production and CO2 emissions on economic growth in Iran: ARDL approach," Energy, Elsevier, vol. 123(C), pages 521-537.

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