The Determinants of Inflation in Iran Based on: Bayesian Model Averaging(BA) and Weighted-Average Least Squares (WALS)

In this research to show how 14 variables affect inflation in period 1974-2007, Bayesian model averaging and weighted average least square methods has been used. And also by using Vselect program optimal model for every independent variable has been identified. Results show that price index growth of imported goods is the main factor for inflation in Iran economic. In ranking this 14 factors –that achieved based on their probability for presence in the model-in turn price index growth of imported goods, GDP growth excluding oil group, lag liquidity are must effective factors.also Vselect results show that the most efficient model among every models that have an independent variable is the model that include price index growth of imported goods. Optimal model with two independent variable –include price index growth of imported goods , GDP growth excluding oil group and optimal model with tree independent variables include price index growth of imported goods , GDP growth excluding oil group, lag liquidity growth.