Evaluation the Effect of Exchange Rate Fluctuations on Medical Care Price Indexes in Iran
Subject Areas : medical documentsHamid Kordbache 1 , Zahra Ahmadi 2
1 - Associate Professor, Department of Human resource Managemen, Shahid Beheshti University of Medical Sciences, Tehran, Iran
2 - M.A Student Department of Epidemiology, Shahid Beheshti University of Medical Sciences, Tehran, Iran
Keywords: Producer price index, Exchange rates, ARCH and ECM models, Medical care, Consumer price index,
Abstract :
Introduction: Given the importance of medical care on the public health and its high inflation rate relative to the changes in the cost of living in Iran, this research is to study the effects of exchange rates on the inflation of medical care. Methods: In this study, an ARCH model has been used to examine the effects of exchange rate fluctuations on the consumer and producer price indexes of medical care for a quarterly dataset over the period 2004 -2014. Moreover, ECM integration method has been applied to investigate the long-term relationship between the variables. Results: Based on the results of ARCH and ECM models, exchange rate, liquidity and GDP have the significant and positive impact son medical care price index in the short and long-term. The finding show that the effects of exchange rate changes on medical care price index for consumer price index and producer price index are0/23 and 0/14 in the short-term and 0/327 and 0/256 in long-term respectively. Conclusion: However the finding of this study asserts a stronger relationship between exchange rate and medical care over the consumer price index compare to the producer price index.
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18- Goldberg PK, Knetter M. Goods Prices and Exchange Rates: What Have We Hearted? Journal of Economics Literature, 1997; 35(3): 1243-1272.
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1- Aguerre RB, Fuertes AM, Phylaktis K. Exchange Rate Pass- Hrough Into Import Prices Revisited, Journal Of International Money, 2012; 31: 818-844.
2- Asgharpur H, Caseroni Miranie N. The Influence of the Inflation Environment on the Effect of Exchange Rate Effects on the Import Price Index in Iran. Quarterly Journal of Applied Economics Theory, 2015; 2: 155-178. [Persian]
3- Ceglowski J. Exchange rate pass-through to bilateral import prices. Journal of international money and finance, 2010; 29(3): 1637-1651.
4- Choudhri EU, Hakura DS. Exchange Rate Pass-Through To Domestic Prices: Does The Inflationary Environment Matter, Journal Of International Money And Finance, 2006; 4: 614-639.
5- Omran M, Turkmen J. Factors Affecting the Pricing in Iran. The economy and agriculture. 2007; 3: 119-138. [Persian]
6- Ratqy M. Effect of Exchange Rate Fluctuations on Price Indices, Master's Thesis: Economy Faculty ofTehran University; 2005. [Persian]
7- Saha S, Zhag Z. Do Exchange Rates Affect Consumer Prices? A Comparative Analysis: For Australia, China and India, Mathematics and Computers in Simulation, 2012; 93: 128-138.
8- Shintani M, Terada-Hagiwara A, Yabu T. Exchange Rate Pass-Through And Inflation: A Nonlinear Time Series Analysis, Journal Of International Money And Finance, 2013; 32: 512-527.
9- Economic Report and Balance Sheet of the Central Bank of the Islamic Republic of Iran. Retrieved From: Www.Tsd.Cbi.Ir
10- Mccarthy J. Pass Through Of Exchange Rates And Import Prices To Domestic Inflation In Some Industrialized Economies, Eastern Economic Journal, 2006; 4: 511-537.
11- National Accounts Statistics Center of Iran. Retrieved From: Www.Amar.Org.Ir
12- Khoshbakht A, Ekhbari M. Reviews The Impact of Exchange Rate Changes on Inflation, Consumer Price Index. 2007; 4: 51-82. [Persian]
13- Khoshbakht M, Ekhbari M. Survey The Intra Relationship Between Inflation and Exchange Rate In Iran, MS Dissertation In Tehran University, Faculty of Economics; 2005. [Persian]
14- Kreinin ME. The Effect of Exchange Rate Changes on the Prices and Volume of Foreign Trade, IMF Staff Paper. 1977; 47: 207-229.
15- Elaine C, Marion H, Christine L.The Exchange Rate and Consumer Prices, Reserve Bank of Australia Bulletin, (2011; 9-16.
16- Tandrayen-Ragooobur V and Chicooree A. Exchange Rate Pass-Through to Domestic Prices: Evidence from Mauritius", Journal of Economics Research, 2012; 18: 1-33.
17- Tayebi K, Nasrollahi. Yazdani M, Malek Hosseini H. Analysis of the Effect of Exchange Rate on Inflation in Iran, Iranian Journal of Economic Research, 2015; 63: 1-36. [Persian]
18- Goldberg PK, Knetter M. Goods Prices and Exchange Rates: What Have We Hearted? Journal of Economics Literature, 1997; 35(3): 1243-1272.
19- Dum RM. Flexible Exchange Rate and Oligopoly Pricing, Journal of Political Economy, 1970; 78: 140-151.
20- Dombusch R. Exchange Rate and Prices, American Economic Review. 1987; 77: 93-106.
