Sometimes, some evident happens in the economic environment that few economists can predict correctly. Although rational choice theory emphasizes that can forecast people’s behavior in the economic fields, it is difficult to determine what “benefit” is and when it would create. Granting 25 million Tomans loan facilities at the rate of 16 percent for a 4-year period was one of the particular points in the anti-recession package applied for booming automobile industry and relevant industries as well. The analysis of economic officials’ speeches shows that it was not expected to sell more than 110 automobiles in a few days. The government tries to curb the inflation by applying fiscal contractionary policies. Even the economic adviser to president predicted that the rate of point to point inflation may reach to single digits by the end of the Persian date Azar 94. In such conditions, this question arises that why with the policies of the government, as well as 16% car loan, is considered as a “good choice” by the people? It seems that part of this issue is due to lack of liquidity and adequate saving among Iranian families. Each urban household earned more than 24 million Tomans in 2014 while the average cost was about 23 million and 486 thousand Tomans i.e. each Iranian family saved only 53 thousand Tomans monthly. The condition is the same even worse in the rural families so that each rural household invested less than 50 thousand Tomans.

Thus, it can be said that it is obvious that low-income families could not save enough to buy automobiles. According to the psycho-economics, it should be stated that the need is very serious for durable goods such as cars in the middle class and the poor groups, but they do not have enough resources to buy them. On the other hand, the welcome shows lack of trust to Central Bank policies since if they trusted the prediction of single-digit inflation, they did not buy 110 thousand automobiles during 6 days with the interest of 16%. Unfortunately, CB has changed into an instrument for the governments not only in this period but also most of the time and it does not have adequate independency for attracting public trust.

In the economics, the reputation and credit of monetary authorities is a key principle for implementing fiscal policies. As the reputation and credit is deeper among brokers, implementing the policies facilitates. Unfortunately, there have been many differences between predicted goals and achieved policies so that except from the period of the Third Plan that inflate rate was less than the goal and targeted purposes in other plans. The growth rate was higher than targeted goals only in 6 years of 21 years from the first to fourth plans and in other cases it was less.

In this regard, it can be said that the CB failed during three decades and this incapability damaged the reputation and credit of monetary authorities because of lack of independency of this organization in selecting goals and some of instrument limitations. It seems that the CB could not predict exactly about inflation since part of it is related to institutional and organizational weaknesses and it cannot be solved soon. Although the government has managed to penetrate the shell of inflation, core of inflation still remains in its place; the rotation of government policies will aggravate the inflation in the financial field as well.

Source: Donyaye Eqtesad Newspaper

No: 3650

date: December 13, 2015