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Oil Price and Inflation in Iran: Non-Linear ARDL Approach

Author

Listed:
  • Hamid Davari

    (Faculty of Economics, Department of Economics, University of Isfahan, Isfahan, Iran,)

  • Alireza Kamalian

    (PhD Student, Faculty of Economics, Department of Economics, University of Isfahan, Isfahan, Iran)

Abstract

In this paper we study the relationship between oil price (or revenue) changes and inflation rate in Iran seasonally in 2003-2015. Method of the study was able to identify asymmetry of oil price and inflation which is recognized as nonlinear autoregressive distributed lag model. Estimated model clarified nonlinear effect of oil price on inflation. Clearly, we found out that there was significant relationship between the reduction in oil price and inflation growth while there was no significant relationship between increase in oil price growth and inflation rate.

Suggested Citation

  • Hamid Davari & Alireza Kamalian, 2018. "Oil Price and Inflation in Iran: Non-Linear ARDL Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 295-300.
    • Handle: RePEc:eco:journ2:2018-03-35
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    References listed on IDEAS

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    2. Shahriyar Mukhtarov & Sannur Aliyev & Javid Zeynalov, 2020. "The Effects of Oil Prices on Macroeconomic Variables: Evidence from Azerbaijan," International Journal of Energy Economics and Policy, Econjournals, vol. 10(1), pages 72-80.
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    9. Zarei, Samira, 2020. "Analyzing the Asymmetric Effects of Inflation and Exchange Rate Misalignments on the Petrochemical Stock index: The Case of Iran," MPRA Paper 99101, University Library of Munich, Germany.

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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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