Abstract: (25 Views)
Introduction: The exchange rate regime plays a central role in shaping economic welfare and income distribution. In Iran, the heavy reliance on oil revenues and high vulnerability to external shocks—particularly international sanctions—have magnified the importance of examining changes in the exchange rate regime. This study provides a qualitative analysis of the evolution of Iran’s exchange rate regime and its implications for economic welfare and income inequality over the period ۱۳۴۶–۱۴۰۰.
Method: This study adopts a qualitative, descriptive–analytical approach. Core indicators include real per capita income, the Gini coefficient, and Sen’s Welfare Index. Data were obtained from the Central Bank of Iran and the Statistical Center of Iran. Exchange rate regimes were classified according to officially announced policies and actual practices. The analysis was conducted using descriptive statistics and composite indicators.
Findings: The qualitative analysis of the evidence indicates that fixed exchange rate regimes, while providing stability, were associated with rent-seeking behavior, inefficient resource allocation, and weakened domestic production. In contrast, floating and multiple exchange rate regimes were accompanied by exchange rate volatility, declining household purchasing power, rising inflation, and widening income inequality. Sen’s Welfare Index revealed significant welfare deterioration during the Iran–Iraq War and the sanctions imposed after ۱۳۹۱, whereas the period from ۱۳۷۸ to ۱۳۸۸ showed relative improvements in welfare indicators due to rising oil revenues and exchange rate stability.
Discussion: The findings confirm the complexity of the implications of exchange rate regime developments for economic welfare and income inequality. Establishing a sustainable exchange rate regime requires effective coordination among monetary, fiscal, and exchange rate policies, together with due consideration of social equity. Moreover, composite indicators such as Sen’s Welfare Index provide a more comprehensive assessment of the implications of exchange rate policies.
Method: This study adopts a qualitative, descriptive–analytical approach. Core indicators include real per capita income, the Gini coefficient, and Sen’s Welfare Index. Data were obtained from the Central Bank of Iran and the Statistical Center of Iran. Exchange rate regimes were classified according to officially announced policies and actual practices. The analysis was conducted using descriptive statistics and composite indicators.
Findings: The qualitative analysis of the evidence indicates that fixed exchange rate regimes, while providing stability, were associated with rent-seeking behavior, inefficient resource allocation, and weakened domestic production. In contrast, floating and multiple exchange rate regimes were accompanied by exchange rate volatility, declining household purchasing power, rising inflation, and widening income inequality. Sen’s Welfare Index revealed significant welfare deterioration during the Iran–Iraq War and the sanctions imposed after ۱۳۹۱, whereas the period from ۱۳۷۸ to ۱۳۸۸ showed relative improvements in welfare indicators due to rising oil revenues and exchange rate stability.
Discussion: The findings confirm the complexity of the implications of exchange rate regime developments for economic welfare and income inequality. Establishing a sustainable exchange rate regime requires effective coordination among monetary, fiscal, and exchange rate policies, together with due consideration of social equity. Moreover, composite indicators such as Sen’s Welfare Index provide a more comprehensive assessment of the implications of exchange rate policies.
Keywords: Exchange rate regime, economic welfare, income inequality, Gini coefficient, Amartya Sen index
Type of Study: orginal |
Received: 2025/08/1 | Accepted: 2026/07/11
Received: 2025/08/1 | Accepted: 2026/07/11
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