Institute for Trade Studies and Research Iranian Journal of Trade Studies 1735-0794 26 104 2022 09 23 Investigating the Interaction Effects of Exchange Rate Regimes and Inflation on Iran's Economic Growth Investigating the Interaction Effects of Exchange Rate Regimes and Inflation on Iran's Economic Growth 47 74 254155 10.22034/ijts.2022.555537.3667 FA Hossein Asgharpur Profosser of Economics, Universityof Tabriz, Tabriz, Iran Sadeq Reazaei PhD in Economics, University of Tehran 0009-0009-5826-1127 Davood Hamidi Razi Department of Economic Development / University of Tabriz Mansour Heydari MSc Graduated, Economics, University of Tabriz, (Corresponding Author). Journal Article 2022 06 10 Inflation in the Iran’s economy, by reducing the competitiveness of domestic economic enterprises against foreign competitors, has led to reduction in production and their exit from the business cycle and, weakening of the national economy as the result. In order to maintain the competitiveness of domestic enterprises, the policy of increasing the exchange rate or adjusting the exchange rate with inflation can be considered as the most important factor in this respect. The main purpose of this study is to investigate the interaction effects of the foreign exchange rate system and inflation on Iran's economic growth using the ARDL method for the period of 1360-1389. Experimental findings show that in Iran’s economy, the two variables of inflation and exchange rate flexibility have a direct negative effect on economic growth, but the interaction effects of the exchange rate systems and inflation on Iran's economic growth are positive. Inflation in the Iran’s economy, by reducing the competitiveness of domestic economic enterprises against foreign competitors, has led to reduction in production and their exit from the business cycle and, weakening of the national economy as the result. In order to maintain the competitiveness of domestic enterprises, the policy of increasing the exchange rate or adjusting the exchange rate with inflation can be considered as the most important factor in this respect. The main purpose of this study is to investigate the interaction effects of the foreign exchange rate system and inflation on Iran's economic growth using the ARDL method for the period of 1360-1389. Experimental findings show that in Iran’s economy, the two variables of inflation and exchange rate flexibility have a direct negative effect on economic growth, but the interaction effects of the exchange rate systems and inflation on Iran's economic growth are positive. https://pajooheshnameh.itsr.ir/article_254155_60413fd1faa30eb4bc3ae3d4e4b88813.pdf