The effect of monetary policy on food inflation in Iran: Quantile Regression Framework

Document Type : Research Paper

Authors

1 Univercity abarkouh

2 Phd Student of Economics, Department of Economics, Azad University, Abarkooh Branch.

3 Assistant Professor of Economics, Islamic Azad University, Yazd Branch

Abstract

In this study, a model based on quantile regresion was estimated using seasonal data from 2001 to 2021. The variables representing monetary policy are the interest rate of banking facilities and the legal reserve rate, and the dependent variables are the growth rate of food, price index. The results based on the estimation of quantile models showed that in all quantiles interest rates had a positive and significant effect on food inflation. Therefore, it can be concluded that with the increase of interest rates, the cost of capital as well as storage will increase; This will have a positive effect on food prices and will affect food inflation, and when interest rates rise in high inflation, due to increased capital costs (due to Increased opportunity cost) will have a greater effect on inflation.

Keywords

References

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Agricultural Economics Research
Volume 14, Issue 3
October 2022
Pages 111-122

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History

  • Receive Date: 29 October 2021
  • Revise Date: 07 February 2022
  • Accept Date: 28 December 2022

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