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Substitution Test between Inflation and Unemployment in Iran: An Application of Kalman Filter (in Persian)

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  • Tehranchian, Amir Mansour

    (Faculty of Economics, Mazandaran University,)

Abstract

In the present paper, the trade off between inflation and unemployment in Iran (1972-2010) was empericaly examined.For this porpuse, four scenarios were designed using Kalman filter method. The obtained results showed that there is an inverse relationship between inflation and unemployment in Iran.The execution of the policies to stimulate supply and reduce inflation expectations are considered as the policy recommendation in this research.

Suggested Citation

  • Tehranchian, Amir Mansour, 2013. "Substitution Test between Inflation and Unemployment in Iran: An Application of Kalman Filter (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. 6(17), pages 17-46, December.
    • Handle: RePEc:mbr:jmbres:v:6:y:2013:i:17:p:17-46
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    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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