Tyranny of numbers

Understanding the rial’s strength

Posted in General, Inflation, Macroeconomy, Sanctions by Djavad on January 18, 2016

Last month a headline (link in Persian) in Eghtesad News read: “Do not buy dollars, it will get cheaper”!  More surprising than the headline was who said it: Iran’s Central Bank Governor, Valliollah Seif.  As his critics were quick to point out, it was unwise for the one official whose economic predictions should be muted and very general — the US Fed’s statements about the future need expert decoding — to claim to know which way the exchange rate will move in the future (you can read here — in Persian — the CBI’s lengthy explanation for the controversial remarks). (more…)

Getting the facts right on Iran’s economic growth

Posted in General, Inflation, Macroeconomy by Djavad on July 31, 2015

A post on Iran’s GDP may seem very wonkish, but it is actually very relevant to two important political debates. One is the current debate in the US about Iran’s economic prospects and the other is the never ending debate in Iran about the economic cost of the Islamic Revolution of 1979.  Neither seem to be well informed with the facts. (more…)

Reporting of economic data in Iran: an old rivalry resurfaces

Posted in General, Inflation, Unemployment by Djavad on June 16, 2015

It is a good sign that people in Iran are paying increasing attention to the accuracy of government data.  Before this they used to dismiss all data, especially inflation, as propaganda (see my previous posts on inflation here and here).  The fact that an announcement about which government agency is authorized to release economic statistics became news last week is a sign that more people take such data seriously, as they should.

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The global sources of Iran’s inflation

Posted in General, Inflation, Macroeconomy by Djavad on November 9, 2014

The recent welcome slowdown of inflation in Iran, like its devastating acceleration four years ago, has something to do with global influences that are well beyond Iran’s control.  The credit in the current slowdown in inflation goes in large part to Rouhani’s economic team but what Iran’s economy minister, Mr. Tayyebnia, has called a “miracle”, has earthly reasons that are not even under the control of Iranian policy makers. Not realizing these influences can be misleading.    (more…)

Inflation and energy price reform in Iran

Posted in General, Inequality, Inflation, Sanctions, Subsidy reform by Djavad on February 19, 2014

The dominant view of the high inflation of the last three years blames it on the subsidy reform. (The latest high profile assertion to this effect came from a piece by Hashem Pesaran and Hadi Salehi Esfahani published by the Fars News Agency, to which Mohammad Ali Farzin, the former head of the subsidy reform program,  responded by claming that only 10% of the inflation was due to the subsidy reform).  Were it not for the fact that blaming energy prices for the destructive inflation of the last three years casts a long shadow over future policy on energy prices, the mere fact that it is wrong would not prompt me to bore the readers of this blog with yet another post on inflation. (more…)

Is it time to declare the war on Iran’s inflation over?

Posted in General, Inflation, Macroeconomy by Djavad on January 27, 2014

This is an update on my last post on inflation, which continues to slow down, and a call for letting inflation drop from the top position on the new government’s list of priorities, to be replaced, hopefully, with fighting unemployment. (more…)