Volume 26, Issue 2 (8-2026)
Social Welfare Quarterly 2026, 26(2): 0-0 |
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MOhammadi nesheli Y, saadat R, kashiyan A M. (2026). Qualitative Analysis of Exchange Rate Regime Evolution and Its Implications for Economic Welfare and Income Inequality in Iran. Social Welfare Quarterly. 26(2), : 3
URL: http://refahj.uswr.ac.ir/article-1-4503-en.html
URL: http://refahj.uswr.ac.ir/article-1-4503-en.html
Abstract: (487 Views)
Introduction: The exchange rate regime plays an important role in economic welfare and income distribution. Given Iran’s dependence on oil revenues and vulnerability to external shocks, particularly sanctions, this study examines the evolution of Iran’s exchange rate regime and its implications for welfare and income inequality during 1967–.2021
Method: This study employs a qualitative, descriptive–analytical approach using time-series data. Real per capita income, the Gini coefficient, and Sen’s Welfare Index are used as key indicators. Data were obtained from the Central Bank of Iran and the Statistical Center of Iran. Exchange rate regimes were classified based on official policies and actual practices, and their outcomes were assessed using descriptive statistics and composite indicators.
Findings: The results show that fixed exchange rate regimes provided relative stability but were associated with rent-seeking, inefficient resource allocation, and pressures on domestic production. Floating and multiple exchange rate regimes, particularly during external shocks, were accompanied by exchange rate volatility, inflation, declining purchasing power, and rising income inequality. Sen’s Welfare Index indicates significant welfare deterioration during the Iran–Iraq War and the post-2012 sanctions period, while 1999–2009 witnessed relative improvements due to higher oil revenues and exchange rate stability.
Discussion: The welfare and distributional effects of exchange rate regimes depend on their interaction with monetary and fiscal policies and external conditions. Sustainable exchange rate management requires coordinated macroeconomic policies and targeted social protection. Sen’s Welfare Index provides a comprehensive measure for assessing exchange rate policy outcomes.
Method: This study employs a qualitative, descriptive–analytical approach using time-series data. Real per capita income, the Gini coefficient, and Sen’s Welfare Index are used as key indicators. Data were obtained from the Central Bank of Iran and the Statistical Center of Iran. Exchange rate regimes were classified based on official policies and actual practices, and their outcomes were assessed using descriptive statistics and composite indicators.
Findings: The results show that fixed exchange rate regimes provided relative stability but were associated with rent-seeking, inefficient resource allocation, and pressures on domestic production. Floating and multiple exchange rate regimes, particularly during external shocks, were accompanied by exchange rate volatility, inflation, declining purchasing power, and rising income inequality. Sen’s Welfare Index indicates significant welfare deterioration during the Iran–Iraq War and the post-2012 sanctions period, while 1999–2009 witnessed relative improvements due to higher oil revenues and exchange rate stability.
Discussion: The welfare and distributional effects of exchange rate regimes depend on their interaction with monetary and fiscal policies and external conditions. Sustainable exchange rate management requires coordinated macroeconomic policies and targeted social protection. Sen’s Welfare Index provides a comprehensive measure for assessing exchange rate policy outcomes.
Article number: 3
Type of Study: orginal |
Received: 2025/08/1 | Accepted: 2026/07/11 | Published: 2026/08/31
Received: 2025/08/1 | Accepted: 2026/07/11 | Published: 2026/08/31
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