we estimated the function of inflation for the period(1971-2009) by using the autoregressive distributed lag (ARDL)method. In addition, we used the error correction model andstability tests. According to our findings, the explanatoryvariables include gross domestic production, saving, governmentexpenditure, liquidity and import. The results show that there isa long-run equilibrium relationship between the variables.According to our findings, the liquidity and governmentexpenditure have positive impact on the inflation and grossdomestic production; saving and import have insignificantnegative effects on the inflation in Iran. The Error CorrectionModel (ECM) is about 73 percent, which indicates amountdeviation of equilibrium. Furthermore, the stability tests show ifthe inflation function is stable, therefore the two tests confirmthat the stability of the inflation function is existent
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