CAUSAL RELATIONSHIP BETWEEN INFLATION AND ECONOMIC GROWTH IN IRAN DURING THE YEARS 1978-2011

Abstract

Achieving high and stable economic growth rate of any country is important. The deleterious effects, particularly on inflation and economic growth are the major problem countries. Therefore, researchers have attempted to explain how the relationship between inflation and economic growth has been concentrated. The hypothesis of this study is two-way causal relationship between inflation and economic growth in Iran during the years 2011-1978 Co-integration test method can be applied in the study of government spending, inflation as measured by CPI indicator, investment and total population GDP as independent variables and the dependent variable is used. The results of the tests show that the model estimates the relationship between inflation and economic growth in this research is one-sided. The inflation of the economy, there is a significant negative correlation between economic growth and inflation, but the relationship does not exist.