Mohammad Bagher Beheshti; Khaled Ahmadzadeh
Volume 11, Issue 3 , October 2007, , Pages 85-106
Abstract
Little effort has been exerted in the domain of the study of the relation between age structure of population with macroeconomic variables and the study of its effects on the economy of Iran. According to Life Cycle Theory, middle-age groups are owners of savings and young and old-age groups are consumers ...
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Little effort has been exerted in the domain of the study of the relation between age structure of population with macroeconomic variables and the study of its effects on the economy of Iran. According to Life Cycle Theory, middle-age groups are owners of savings and young and old-age groups are consumers (their consumption is more than their savings). Wicksell’s cumulative Inflation Process Theory, founded on the resolutions of saving and investment, also foresees that the surplus of the demand raised from the difference in interest rate would contribute to the surplus of consumption which would cause, in turn, demand pressure and finally would result to more inflation. The presernt study is a document-experiment research and combining the above mentioned two theories, tries to analyze the effects of the age distribution of the population on inflation in the Iran, using estimation in OLS method. The findings of the research showed that the consuming age groups i.e. the ages between 0 – 14 years, 15 - 19 years, and over 64 years have a meaningful positive effect on the inflation, while saving age groups i.e. ages between 30 - 44 and 45 - 64 years have a meaningful negative effect on the inflation. The population limiting policy which has been exerted since 1989 has also had a meaningful negative effect on the inflation in Iran.
