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The asymmetric effects of monetary policy, currency crises and oil price on food inflation in Iran: an application of quantile regression

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  • Davoud Mahmoudinia

Abstract

Since the food component has a large weight in the CPI basket and food inflation plays one of the main roles in determining the headline inflation in Iran, this paper looks at connections between monetary policy, currency crisis, sanction and food price. To examine the dynamics and asymmetric effects of these relationships, we employ quantile regression. Empirically, we show that the coefficients of monetary policy, exchange rate and currency crisis on the food prices in different quantiles are positive and significant. In most cases, we show that food prices in Iran are responsive to the price of oil.More importantly, the inflation of food is strongly linked to economic sanctions, and the effect is significant across all quantiles. To verify robustness, the food price model was estimated using ARDL model as an alternative. The present study came up with the same results when compared to quantile regression.Eventually, asymmetric effects at different quantiles were confirmed.

Suggested Citation

  • Davoud Mahmoudinia, 2026. "The asymmetric effects of monetary policy, currency crises and oil price on food inflation in Iran: an application of quantile regression," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 19(1), pages 176-198, January.
    • Handle: RePEc:taf:macfem:v:19:y:2026:i:1:p:176-198
    DOI: 10.1080/17520843.2021.2005926
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