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Cost-push impact of motor spirit price on price indices and inflation

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Author Info

  • Nooraddin Sharify

    () (Department of Economics, University of Mazandaran, Babolsar, Iran.)

  • M. Alejandro Cardenete

    () (Department of Economics, Universidad Pablo de Olavide)

Abstract

Any increment in the prices of goods or services generally leads to an increase in different products prices indices and inflation. This paper examines the cost-push impact of a motor spirit price increment in Iran on different products prices indices and inflation. An Input-Output (I-O) table adjustment approach is applied. Iran input- output table for the year 2001-2002 is used as database. The empirical results of the model show how the cost-push impact of a 25% increment in the motor spirit price leads to an increment in different products prices indices, but the maximum effect of this increment, which is on transportation services prices, does not exceed 0.7492%. In addition, the cost-push effect of this increase on the Production Prices Index (PPI) is estimated at 0.2540%.

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File URL: http://www.upo.es/serv/bib/wps/econ0711.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by Universidad Pablo de Olavide, Department of Economics in its series Working Papers with number 07.11.

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Length: 13 pages
Date of creation: May 2007
Date of revision:
Handle: RePEc:pab:wpaper:07.11

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Keywords: Input-Output; Motor Spirit Pricing; Price model; Iran.;

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