Instability in Macroeconomic and Private Sector Investment in Iran

Abstract

In this paper, budget deficit, trade balance deficit, inflation rate, fluctuations of exchange rate and terms of trade variables are determined as a base of macroeconomic instability, using moving average method with five-year stable trends estimated for all the considered variables. Macroeconomic instability is defined as deviation from stable trends, and finally, we will study the effects of instability variables on private sector investment in Iran.