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Effectiveness of Stimulating Nominal Demand Policies in Economy of Iran (The Short-run slope of the Phillips Curve in Iran) (in Persian)

Author

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  • Nili, Masoud

    (Iran)

  • Barakchian, Seyed Mahdi

    (Iran)

  • Eslami, Keyvan

    (Iran)

Abstract

The main purpose of this study is to provide an estimate of the short-run slope of the Phillips curve in Iran. The subject is important¡ first¡ because¡ it reveals the relation between the real and the nominal sectors of the economy¡ and second¡ because¡ it has crucial policy implications. We especially investigate whether this relationship has been changed during the last five decades following the changes in economic and structure environment. Our findings indicate a strong relationship between the real output and the nominal demand before 1972. This connection¡ however¡ starts weakening after 1973¡ and almost diminishes after 1992. Moreover¡ our observations reveal that the main element in the decline of the trade-off parameter¡ in the beginning of the 70’s¡ was imperfect information¡ whereas the mechanism of the price stickiness used to play an influential role in the sharp decrease of the Phillips curve slope in the early 90’s.JEL Classification: E13, E12, E24, E52, E32

Suggested Citation

  • Nili, Masoud & Barakchian, Seyed Mahdi & Eslami, Keyvan, 2011. "Effectiveness of Stimulating Nominal Demand Policies in Economy of Iran (The Short-run slope of the Phillips Curve in Iran) (in Persian)," Journal of Monetary and Banking Research (فصلنامه پژوهش‌های پولی-بانکی), Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 3(7), pages 1-40, June.
    • Handle: RePEc:mbr:jmbres:v:3:y:2011:i:7:p:1-40
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    Keywords

    Incomplete Information; Price Stickiness; Menu Costs; Phillips Curve; Structural Break; Business Cycle Persistence;
    All these keywords.

    JEL classification:

    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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