Measuring Monetary and Debt Roots of Inflation by Panel Data Approach (Case Study: Iran, South Korea, China and India)

摘要

The main objective of this survey is testing the Fisher's quantity theory of money and the Fiscal Theory of the Price Level (FTPL) to measure the root of money or debt of inflation; for Iran, South Korea, China and India by panel data approach. Thus at the first step we expressed the theoretical fundamental of Fisher's quantity theory of money, FTPL theory and checking research background (similar internal and external studies). In the next step we estimate panel models by considering various conditions and the related tests (F Learner and Hausman) and finally we identified the monetary root and debt of Inflation by selecting a fixed effects panel model. The survey results also indicate that in the panel estimates of all models (fixed effects), the coefficient of annual amount of money growth variable (MQMgr) was a significant factor and other factors are meaningless, including the annual growth rate of government debt to GDP. So in these countries, the monetary root of inflation confirmed but the debt root of inflation is not verified. The results of this study adapt with all internal and external studies in the field of monetary roots of inflation in most developing countries. Therefore we suggested liquidity management, adjustment of debt monetary policy, enhancing the productivity and technological power of production, currency control and reducing the dependence on foreign earnings from oil exports as well as controlling the budget deficit and government debt as a policy solution for inflation adjustment.