Common Trends and Structural Change: A Dynamic Macro Model for the Pre- and Postrevolution Islamic Republic of Iran

June 1, 1999

Preview Citation

Format: Chicago

Torbjorn I. Becker Common Trends and Structural Change: A Dynamic Macro Model for the Pre- and Postrevolution Islamic Republic of Iran, (USA: International Monetary Fund, 1999) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper uses a common trends model to study how prices, the black market exchange rate, money, and real output have developed over a period covering both pre- and post-revolution Iranian data. It is shown that monetary shocks have significant short-run effects on output, but permanent effects on the price level and exchange rate, that is, expansionary monetary policy is not consistent with achieving low inflation or a stable unified exchange rate. The real shocks generate higher growth and lower inflation, suggesting that supply-side policies are consistent with the goals in the Islamic Republic of Iran’s second five-year development plan.

Subject: Demand for money, Exchange rates, Foreign exchange, Inflation, Money, Prices, Purchasing power parity

Keywords: Cointegration, Demand for money, Demand shock, Exchange rate, Exchange rates, Inflation, Inflation rate, Integrating vector, Money demand, Money demand function, Nominal exchange rate, Output, Purchasing power parity, Real and nominal shocks, Time series, WP

Publication Details

Pages:

30
Volume:

---
DOI:

---
Issue:

---
Series:

Working Paper No. 1999/082
Stock No:

WPIEA0821999
ISBN:

9781451850420
ISSN:

1018-5941

FACTSHEETS

RESOURCES

TOPICS

Flagship Publications

Other Publications

IMF reports and publications by country

Regional Offices

All News

See Also

For Journalists

Press Center

RESOURCES

FLAGSHIPS

KEY SERIES

IMF NOTES

IMF Working Papers