This paper reviews the relationship between inflation rate and minimum wage in Iran’s economy over the 1969-2005. According to the economic literature, there is a narrow relationship between inflation rate and minimum wage. Some economists believe in increased inflation due to minimum wage. The other group of economists considers the increased inflation as a cause for increasing minimum wage. The study results do confirm the existence of causal relationship from inflation rate to minimum wage.
JEL Classification: E24, E31, J31 .
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