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:: Volume 2, Issue 8 (9-2012) ::
2012, 2(8): 141-158 Back to browse issues page
Analyzing the Asymmetric Effects of Inflation on Real Investment in Iran
Seyed aziz Arman , Masumeh Mirabizadeh
Abstract:   (7724 Views)

  The purpose of this paper is to analyze the effects of inflation on real investment in Iran. After briefly reviewing the investment theories and their situation in Iran, we consider the determinants of investment by using annual data (1958-2009).

  Results of the Augmented Dickey- Fuller (ADF) test indicate that all of the variables appearing in model are I(1). So, the results of the threshold regression model indicate that real GDP, the trade openness index and inflation rate can influence investment.

Results also show that the effect of inflation on investment follows an asymmetric adjustment process. The threshold level for the rate of inflation has been estimated 11.9 percent. If the annual rate of inflation exceeds this threshold level, it will have a negative impact on investment. But, if inflation remains below this level, not only the negative effect fades away but also rising prices can boost investment.

Keywords: Investment, Threshold regression, Iranian economy
Type of Study: بنیادی | Subject: پولی و مالی
Received: 2011/11/26 | Accepted: 2012/09/2 | Published: 2012/09/15
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arman S A, Mirabizadeh M. Analyzing the Asymmetric Effects of Inflation on Real Investment in Iran. Journal title 2012; 2 (8) :141-158
URL: http://jfm.khu.ac.ir/article-1-345-en.html

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Volume 2, Issue 8 (9-2012) Back to browse issues page
فصلنامه تحقیقات مدلسازی اقتصادی Journal of Economic Modeling Research
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