Investigating the effect of liquidity on inflation in Iran

摘要

In this paper, equivalence relation and long term of six variables gross domestic product, domestic?deposit?rates, foreign?interest rates, nominal?exchange?rate, sizeliquidity,?inflation rate ?and also their influences on each other in Iran and for years 1973 to 2008 has been analyzed. For this purpose, vector autoregressive model (VAR) has been used. First, stability of variables by the use of dickey-fuller test has been examined. Next, analysis of Johnson test for considering the convergence among five variables has been used. The results of this research show that variables of domestic?deposit?rates, foreign?interest rates, size?liquidity,?have positive effect on inflation rate. Also variables of?nominal?exchange?rate,?gross domestic product, have a negative effect on inflation rate.