پرویز حاجیانی

Background: Inflation is one of the major and important indices of economy which is considered by economists and politicians. Given the importance of the supply side in developing and energy exporting countries, in this study we use producer price inflation and investigate the effects of possible supply shocks on this kind of inflation. In this ground, in order to investigate the effects of price and nonprice shocks on producer inflation, supply shocks were divided into two categories of productivity shocks (energy and labor productivities) and price shocks (export price of energy and labor wage). Aim: The main purpose of this study is analyzing the shortrun and logrun relationship among the energy price, wage, energy productivity, labor productivity and producer inflation variables. In fact we are seeking to answer this question whether an increase in energy price and wages causes producer inflation in Iran (and vice versa) and also whether cost push inflation in Iran affected by energy and labor productivity or affect them? Methodology: In order to analyzing the effects of mentioned variables on producer inflation in Iran for the period of 1346-1391, two vector error correction models were analysed separately that the first model includes producer inflation, GDP gap, labor productivity and energy productivity. In the second model producer inflation, output gap, wage and energy price variables were used and their causality direction is specified by Wald test in the vector error correction models. Conclusions: the results of the productivity model shoed that there are long run relationships among variables and there is no causality relation between variables but in the long run there is bidirectional causality between producer inflation, GDP gap, labor productivity and energy productivity. Also, in the price model there is a long run relationship between variables. In this model this view that the producer inflation is not affected by the change of energy price in e