The Inflationary Process of the Iranian Economy, 1970–1980

Abstract

During the past decade, the Iranian economy has experienced two severe shocks. The first was the huge increase in oil revenues and the subsequent increase in government expenditures. The second was the Iranian revolution, with the concomitant flight of capital and production setbacks. The first shock produced in the Iranian economy severe inflation that, although not unfamiliar to the Iranians, has been unprecedented in scale and is still accelerating. Analysis of the causes of this inflation is important for understanding the course of events and for predicting future trends.

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