Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran
A significant deviation of the official exchange rate from the market equilibrium rate is indicative of fundamental problems in macroeconomic policies and underlying imbalances in the economy. Maintaining a fixed exchange rate policy is neither sustained nor stable tends to lead to a range of distortions in the economy, which results in a lower growth rate in GDP. Given this, this study has investigated the Effect of the Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran from 1979 to 2022. To this end, the study first identifies the most significant determinants of the consumer price index of imported goods using a Time-Varying Parameters Dynamic Model Averaging (TVP_DMA). Subsequently, the Effects of the Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods has been evaluated using a Time-Varying Parameter Vector Autoregression (TVP-VAR) model. Based on the results obtained, the Official and Unofficial Exchange Rate Market Gap Shock initially led to a significant increase in the Import Price Index of Consumer Goods. This effect was particularly pronounced during periods of economic instability. However, in the long run, the Effects on the Import Price Index of Consumer Goods has diminished. Accordingly, it is recommended that policymakers reduce the Official and Unofficial Exchange Rate Market Gap and implement stabilization policies to prevent excessive fluctuations and mitigate inflationary pressures on the Import Price Index of Consumer Goods.
Alikhani, A. , Tayebi, S. K. and Daei Karimzadeh, S. (2024). Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran. Journal of Economics and Modelling, 15(3), 1-35. doi: 10.48308/jem.2025.238146.1968
MLA
Alikhani, A. , , Tayebi, S. K. , and Daei Karimzadeh, S. . "Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran", Journal of Economics and Modelling, 15, 3, 2024, 1-35. doi: 10.48308/jem.2025.238146.1968
HARVARD
Alikhani, A., Tayebi, S. K., Daei Karimzadeh, S. (2024). 'Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran', Journal of Economics and Modelling, 15(3), pp. 1-35. doi: 10.48308/jem.2025.238146.1968
CHICAGO
A. Alikhani , S. K. Tayebi and S. Daei Karimzadeh, "Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran," Journal of Economics and Modelling, 15 3 (2024): 1-35, doi: 10.48308/jem.2025.238146.1968
VANCOUVER
Alikhani, A., Tayebi, S. K., Daei Karimzadeh, S. Evaluating the Effect of Official and Unofficial Exchange Rate Market Gap Shock on the Import Price Index of Consumer Goods (Exchange Rate Pass-through Approach) in Iran. Journal of Economics and Modelling, 2024; 15(3): 1-35. doi: 10.48308/jem.2025.238146.1968
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