Comparing Accuracy of First Statude and Second Statude of Forecasting Error of Government Public Costs and Examining Effects of that on Inflation in Iran

Shadmani, Ghasem; Karimi Potanlar, Saeed; Jafari Samimi, Ahmad

Comparing Accuracy of First Statude and Second Statude of Forecasting Error of Government Public Costs and Examining Effects of that on Inflation in Iran

Document Type : Original Article

Authors

Ghasem Shadmani ¹

Saeed Karimi Potanlar ²

Ahmad Jafari Samimi ²

¹ Ph.D Student in Ecocnomics, Faculty of Economic and Administrative Sciences, University of Mazandaran

² Associate Professor of Faculty of Economic and Administrative Sciences, University of Mazandaran

Abstract

In respect of dominant role of government public costs in Iran’s economy, forecasting accuracy of that and its evaluation has a high degree of importance. In this research, based on various statistic, both summary statistics and aggregate statistics, forecasting accuracy of first statude and second statude of Forecasting Error of Government Public Costs are evaluated over the period 1353-1392. Then, stochastic and determined components of forecasting error of these errors are obtained. Afterwards, the forecasting errors effects on price level and inflation in Iran are investigated by Vector Error Correction Model. The results of research indicate that considerable part of forecasting error of public costs are determined and correctable. Moreover, negative part of forecasting errors of expense element of government’s budget have significant and positive effect on price level and inflation in Iran.

Keywords

Forecasting Error

Government Public Costs

Inflation

VECM model