Investigation of the Role Renewable and new energies on the Inflation Rate of Iran

Document Type : Original Article

Authors

1 Ph.D. Student Monetary Economics, Ferdowsi University of Mashhad, Mashhad, Iran

2 Associate Professor in Economics, Ferdowsi University of Mashhad, Mashhad, Iran

3 MSc in Economic Development and Planning, Islamic Azad University Science and Research Branch Tehran, Tehran, Iran

Abstract

The role of energy in the global economy may highlight the importance of energy. Iranian researchers to examine the current state and prospects of Renewable and new energies have conducted numerous studies, but there is no information on the effects of different types of renewable and new energies on Iran inflation rate. The main objective of this study is to investigation of the role renewable and new energies on the inflation rate of Iran during the period of 1979-2018. For this analysis, Autoregressive Distributed Lag and Counteraction method Short and long run relationship between variables is used to determine the existence. The results that coefficient of the error correction method indicates that about 0.68 of the short-term imbalance is adjusted in each period to achieve the long-term equilibrium. It is estimated that the relationship between inflation rate, GDP per Capita, labor force, renewable energy investment by the private sector,  and the production of types of renewable and new energies (solar, wind, hydro, geothermal and biomass) in the Short and long run, it is declining. In addition, the variables of labor, GDP, investment in the private sector and various types of renewable energy sources (solar, wind, water, geothermal and biomass) reduce inflation rate in the long run. So that in the long run, the use of one percentage of these variables reduces leads to 0.82, 0.76, 0.75, 0.61, 0.54, 0.34, 0.31 and 0.64 percentage decrease in the inflation rate. This means that renewable energy It does not have a devastating effect on inflation,and it also causes economic growth in the long run.

Keywords

References

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History

  • Receive Date: 24 March 2020
  • Revise Date: 28 May 2020
  • Accept Date: 07 June 2020

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