The Role of Productive and Non-Productive Cooperatives in Control Inflation in Kermanshah Province; with Emphasis on Importance of Cooperation in Islam

According to the economic principles of the constitution of the Islamic Republic of Iran, the cooperative economy along with the private and public sectors is set as one of the three sectors of the Iranian economy. Cooperative has always emphasized on the fair distribution of income and social justice in Islamic teachings, but in the present study, the effects of formation of cooperatives on other macroeconomic variables such as inflation control will be investigated. Therefore, using econometric models and with ARDL approach, the effect of value added of Kermanshah's productive and non-productive cooperatives on inflation is calculated and estimated at the time of 1981-2014. The experimental results of the model indicate a positive relationship between the increased value of production cooperatives and the inflation rate due to the existence of business cycles and the boom period, and as a result of an increase in inflation due to increased production. There is also a negative relationship between the increased value of non-productive cooperatives and the inflation rate, due to increased supply of goods and services, which have led to a reduction in inflation. The relationship of other variables such as production gap, liquidity growth and exchange rate with inflation rate are positive and relationship between import volume and inflation rate is negative.