Studying the relation between inflation rate and interest rate based on Fisher's theory of the Iranian economy

This paper examines the main macroeconomic variables, including inflation and interest rates will. Some policymakers and experts believe The increase in interest rates increase production costs and consequently increase the price level and inflation. On the other hand, according to economic theory, Increase in interest rates will rise in inflation rate. The aim of this research is to study relationship inflation rate with one year short term interest rate, Three-year medium-term interest rate and Long-term interest rates(5 years) by using Least squares estimation methods and econometric models Fisher is a particular model. Purpose of interest rate in this study, Bank deposit interest rate is to be announced by the Central Bank of Iran And the inflation rate based on the total index of consumer prices for goods and services in urban areas of Iran where the annual percentage change in prices (inflation) has been calculated by the Central Bank, Is extracted. Data used in this study for a period of 18 years (1991- 2009) is. Results indicate a significant relationship between inflation and interest rates be one year. And the inflation rate with The three-year and five years interest rate Not found a significant relationship.