Study the Uncertainty Inflation Impact on Intermediate and Capital Goods

Due to the high level of inflation in in Iran’s economy and price shocks occurred in recent years,the importance of investigating the effects of the price shocks that high inflation uncertainty ispart of its effects and affects the imports of intermediate and capital goods is understood. In thisstudy, the effect of inflation uncertainty on imports of capital and intermediate goods isaddressed. The period under study is within the years of 1972-2011 analyzed by VAR1econometric technique. The result is that the uncertain inflation rate and terms of trade have asignificant and positive impact on intermediate and capital goods imports.

Keywords:

exchange rate uncertainty , capital goods , intermediate goods , trade