In an interview with IBNA, Mohammad Gholi Yousefi added: “In fact, it does not matter what the average annual or point-to-point inflation rate is, and what is important is the relative prices of goods and services.” What matters in economics is the relative change in prices, not the macroeconomic index. Inflation and economic growth are also macroeconomic indicators that are important for governments.
“The main issue that determines inflation is the volume of liquidity and transactions and the increasing coefficient of money,” he said. “Given that inflation is usually the cause of liquidity, the cause of injecting banks’ financial resources into the economy is the budget deficit.”
The economist said: “High liquidity is also due to the high costs of the government, which in order to reform this chain, the government must be reduced, and for this, the country’s constitution must be amended. Until these reforms take place, we will have a big government, followed by high government spending.
Gholi Yousefi continued: “On the other hand, oil countries, by nature, because they rely on oil revenues and oil money is injected into the economy, usually have inflation, in other words, part of inflation is inherent.” At the same time, the psychological atmosphere, sanctions, instability and lack of productive investment in the country will increase prices and ultimately inflation.
He added: “In these circumstances, control is lost from the central bank because an institution alone can not bring about major change, as if the central bank is pursuing good policies seriously.” In a country where production is not booming, liquidity will rise for various reasons and the central bank will not be able to do anything.
“I do not think that there will be an invisible hand in this situation, but even with Joe Biden in the presidency, it will take months,” he said, adding that he hoped for continued inflation in the coming months. He waited and saw what would happen.