The Importance of A Stable Macroeconomic Environment

Macroeconomic Stabilitv is a major prerequisite fo r real economic
growth. In th is Study in order to allalyse tile empirical relation ship between macroeconomic instability and per capita real growth, a regression model has been specifi ed for tile Iranian economy . In this equation , lour
variables including hudget deficit as a ratio to GDP. intlation rate ,
percenltlge change in tile rea! exchange rate. and thestandard deviation of
percentage chone in the term s of trad e have been used as proxies for
macroeconomic instability. The equation lias been estimated by OLS
technique using annual data of the Iranian economy .for 1342- 77.0ur
findings point out that macroeconomic instability in lran is a serious
obstacle to economic growth . Securing macroeconomic Stability requires a
mor' effective macroccononuc management. Pursuit of sound
macroeconomic policies and greater Fiscal discipli e