By AIC Research Fellow Andrew Lumsden
The term “inflation,” for most, brings to mind images of 1920s Germany or, more recently, Venezuela where the currency has been so devalued that a loaf of bread or a cup of coffee can cost million. Though not to the same degree as in these cases, nearly all economies around the world experience inflation and keeping it in check often requires diligent efforts on the part of governments.
Iran has struggled with relatively high inflation since the late 1970s, but seemed to have been making substantive progress in curtailing inflation during President Rouhani’s first term. However, the United States' monetary policies and its November 2018 re-imposition of economic sanctions has sent Iran’s economy into a tailspin, sending inflation soaring to high levels. What follows is a brief overview of Iran’s experience with high inflation over the past three decades and the ways in which its government and population have reacted to it and how they plan to approach the coming uncertain, potentially difficult years.Read More