01909cas a2200253 a 4500 AALejournalIMF001301 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451854978 1018-5941 BD-DhAAL BD-DhAAL Liu, O. Determinants of Inflation in the Islamic Republic of Iran : A Macroeconomic Analysis / O. Liu, Olumuyiwa Adedeji. Washington, D.C. : International Monetary Fund, 2000. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This study establishes a framework for analyzing the major determinants of inflation in the Islamic Republic of Iran. An empirical model was estimated by taking into consideration disequilibria in the markets for money, foreign exchange, and goods. Results strongly support the need for a sustained prudent monetary policy in order to reduce inflation and stabilize the foreign exchange market. The estimation shows that an excess money supply generates an increase in the rate of inflation that, in turn, intensifies asset substitution (from money to foreign exchange), thereby weakening real demand for money and exerting pressures on the foreign exchange market. The study also found that a permanent rise in real income tends to increase the real demand for money and reduces inflation in the long run. Mode of access: Internet Adedeji, Olumuyiwa. IMF Working Papers; Working Paper ; No. 2000/127 Full text available on IMF http://elibrary.imf.org/view/journals/001/2000/127/001.2000.issue-127-en.xml IMF e-Library