Investigating the Relationship between Inflation and Price Fluctuations of Agricultural Products in Iran

Subject Areas : Agricultural Economics Research

Mohammad Javad Mehdizadeh Rayeni ¹ , Hamid Mohammadi ² , Saman Ziaee ³ , mahmoud ahmadpour ⁴ , Mashaallah Salarpour ⁵

1 - Ph.D student in Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran.
2 - Assistant Professor of Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran.
3 - Associate Professor of Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran.
4 - Assistant Professor of Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran.
5 - Assistant Professor of Agricultural Economics, Faculty of Agriculture, University of Zabol, Zabol, Iran.

Received: 2019-10-15 Accepted : 2022-12-28 Published : 2022-10-23

Keywords: Iran, Vector Error Correction Model, Inflation, Agricultural Prices, Expected Inflation,

Abstract :

Price stability of agricultural products is related to the stability and development of the agricultural products market. Inflation in Iran, despite the intense fight against it, is increasing at a worrying rate, and has become the most important economic problem in the country. This study investigates the relationship between inflation and expected inflation with price fluctuations of agricultural products in Iran using self-explanatory method and Granger causality test during the period 1991-2019 in the form of quarterly data.The results showed that the inflation rate has a positive and significant effect on price fluctuations of agricultural products during the study period. Expected inflation variable also has a positive and significant effect on price fluctuations in agricultural products. The results of Granger causality test also showed that there is a two-way cause and effect relationship between expected inflation and price fluctuations in agricultural products. There is also a two-way causality relationship between inflation and expected inflation. There is also a one-way causal relationship between inflation and agricultural price fluctuations.

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