Relationship Between Inflation and Economic Growth in Iran (Rolling Linear Regression)

Economists pay lots of attention to the effective factors on the economic growth in the form of the growth models. For this purpose, the relationship between inflation and economic growth in Iran was studied in the years 1978-2010. First an adjusted model was designed based on the (Barro) template and then the relationship between inflation and economic growth was investigated using ARDL model. The results derived from the estimations made by the pattern revealed that in the period under consideration the effect of the inflation on the economic growth in all inflationary levels was negative and meaningful. One percent increase in inflation rate causes the short term reduction of 0.0009% in economic growth and long term reduction of 0.001%. Moreover, rolling linear regression model confirms the negative relation between inflation and economic growth.