Analysis of domestic price and inflation determinants in Iran: (as a developing oil-export based economy)

The objective of this study is to examine and investigate both behaviour and determinants of domestic prices and inflation rate in Iran as a developing oil export based economy. I apply two models. The first model is for investigating the main determinants of domestic prices while the second model considers the main determinants of inflation rate. In the second model I apply the model which has suggested by Aljebrin(2006) to investigate the inflation in developing oil based economies. Our results imply that the rapid development of the non-oil sector and performing some useful policies for restructuring the economy such as diversifying the economy from the oil sector will strengthen the economy and reduce the importance of oil production as a source of inflation