Document Type : Original Article

Authors

1 Associate Professor, Faculty of Administrative Sciences and Economics, Vali-e-Asr University of Rafsanjan, Rafsanjan, Iran.

2 Master's Degree in Economics, Vali-e-Asr University of Rafsanjan, Rafsanjan, Iran.

10.22096/esp.2024.1974311.1674

Abstract

Inflation is one of the fundamental problems of less developed countries, which has always been a big challenge for policy makers due to its wide economic, social, cultural and political consequences. In this research, we explained John Nash's ideal money, and considering that reaching the ideal money desired by Nash and achieving zero inflation rate, especially in the economies of developing countries, including Iran, are facing bottlenecks, therefore in this research by estimating the threshold and optimal level of inflation, it has been tried to be close to the ideal and considered level of inflation and to examine its economic consequences. Hence, in the framework of the threshold and non-linear time series regression model in the period of 1959-2020 for the Iranian economy, the results indicate that the threshold and optimal level of inflation in the Iranian economy is between 10 and 12 percent. Finally, it is suggested that the government and the central bank, by adopting appropriate monetary and financial policies, bring the real inflation level closer to its optimal level in order to increase the economic growth and maximize the welfare of the society.

Keywords

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