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Openness and Inflation in Iran

Author

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  • Jafari Samimi, Ahmad
  • Ghaderi, Saman
  • Sanginabadi, Bahram

Abstract

-The purpose of this paper is to test the hypothesis first documented by [1], that inflation is lower in more open economies. According to this hypothesis, central banks have a smaller incentive to engineer surprise inflations in more-open economies because the Phillips curve is steeper. We utilized the ARDL Bounds test approach to level relationship proposed by [2] for Iranian annual data over the period 1973-2007. Results from Bounds test approach confirm existence of long-run relationship among the variables under consideration. The results show that openness has negative and significant effect on inflation in short-run but its effect in long-run is not significant.

Suggested Citation

  • Jafari Samimi, Ahmad & Ghaderi, Saman & Sanginabadi, Bahram, 2011. "Openness and Inflation in Iran," MPRA Paper 52408, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52408
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    References listed on IDEAS

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    1. repec:agr:journl:v:3(604):y:2015:i:3(604):p:143-154 is not listed on IDEAS
    2. Mostafa SALIMIFAR & Mohammad Javd RAZMI & Zahra TAGHIZADEGAN, 2015. "A survey of the effect of trade openness size on inflation rate in Iran using ARDL," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(604), A), pages 143-154, Autumn.
    3. Jafari Samimi, Ahmad & Ghaderi, Saman & Hosseinzadeh, Ramezan & Nademi, Younes, 2012. "Openness and inflation: New empirical panel data evidence," Economics Letters, Elsevier, vol. 117(3), pages 573-577.
    4. Ayza Shoukat & Muhammad Abdullah & Muzammal Rafique & Ghulam Muhammad Qamri, 2023. "Exploring the Link between Globalization and Inflation: Evidence from Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 155-161.
    5. Fiaz Ahmad Sulehri & Javaria Khan, 2020. "The Effect Of Trade Openness On Inflation In Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 9(3), pages 135-140, September.

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    More about this item

    Keywords

    Keywords-Openness; Inflation; Iran; ARDL Bounds test approach.;
    All these keywords.

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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