This article examines the basic assumption of Rational Expectations Hypothesis on Iran's economy from 1966 to 2003. This assumption suggests the neutrality or ineffectiveness of money policy on the development of real variables of production and employment. The results from estimation of production equation do not support the significant influence of unanticipated component of money growth on the production variable. In other words, the results, support the hypothesis suggesting the significant influence of systematic and anticipated money growth on the economics growth in Iran. Moreover, the results from the estimation of unemployment rate equation, do not support the hypothesis suggesting the significant influence of unanticipated money growth on the real employment variable, whereas support the hypothesis suggesting the significant influence of anticipated money growth during a time lag. In other words, the results of this study do not support the neutral effect of systematic Monetary Policy on real variables of production and employment.
JEL Classification: E50 ,E52 ,E58 ,E59
Heidarie, E. (2009). Money Growth and It’s Effect on Production and Employment in Iranian Economy. Journal of Economic Research (Tahghighat- E- Eghtesadi), 43(4), -.
MLA
Ebraheim Heidarie. "Money Growth and It’s Effect on Production and Employment in Iranian Economy", Journal of Economic Research (Tahghighat- E- Eghtesadi), 43, 4, 2009, -.
HARVARD
Heidarie, E. (2009). 'Money Growth and It’s Effect on Production and Employment in Iranian Economy', Journal of Economic Research (Tahghighat- E- Eghtesadi), 43(4), pp. -.
VANCOUVER
Heidarie, E. Money Growth and It’s Effect on Production and Employment in Iranian Economy. Journal of Economic Research (Tahghighat- E- Eghtesadi), 2009; 43(4): -.
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