Inflation Persistence in Iran: A Bootstrapping Approach

Document Type : Research Paper


Associate Professor in Economics, Faculty of Economics, Management, and Business, University of Tabriz, Tabriz, Iran


Using quarterly data from 2002:1 to 2013:2 we study the persistence in the inflation rates in Iran based on the total CPI and the CPI in 12 subgroups. The persistence is investigated using two different tools: (i) the ADF unit root test and (ii) bootstrap confidence intervals. We calculate a 90% confidence interval for the sum of the autoregressive coefficients, as a measure of persistence, using the grid bootstrap approach proposed by Hansen (1999). The results show no sign of persistence in the following five subgroups: Communications; the Food and Beverages; Food; Goods; and Transportation. On the other hand, the total inflation rate based on CPI and inflation in the Cloth, Education, Health, Recreation, and Shelter subgroups support the inflation persistence. For the remaining two subgroups, the results are mixed and inconclusive.


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Volume 50, Issue 3 - Serial Number 3
October 2015
Pages 707-732
  • Receive Date: 19 October 2014
  • Revise Date: 16 March 2015
  • Accept Date: 06 October 2015
  • First Publish Date: 23 October 2015