Many economists believe that the main channel that inflation makes its harmful impacts on economy is the inflation uncertainty. Inflation uncertainty by its ex-ante and ex-post effects influences the economic agent's real activities and hence causes serious costs on economy.
Thus, determining the relationship between inflation and inflation uncertainty can help the policy makers to make appropriate decisions and prevent economy from bearing such costs.
In this study our main goals were: first, measuring the inflation uncertainty, second determining the relationship between inflation and inflation uncertainty both in short and long run.
The results show that the relationship between these variables in short run is positive. But in the long run there is no relationship. Also in the short run, negative inflation shocks have less effect on inflation uncertainty, comparing with positive ones.
JEL Classification: E31
', './data/jte/coversheet/cover_en.jpg'))