Investigating the Effect of Exchange Rate Uncertainty on Inflationary Expectations with a Fuzzy Approach


Articles in Press, Accepted Manuscript
Available Online from 30 June 2026

Document Type : Research Paper

Authors

1 Assistant Professor , Department of Economics, Faculty of Management, and Economics, Lorestan University, Khorramabad,, Iran

2 PhD student in Monetary Economics, Alzahra University, Tehran, Iran.

Abstract
Exchange rate uncertainty, along with the intensification of cost and psychological pressures, is considered one of the most important drivers of inflationary expectations instability in the Iranian economy. On the other hand, controlling inflationary expectations is very crucial for establishing stability in the country's economy. Given the importance of this issue, the aim of the present study is to investigate the effect of exchange rate uncertainty on inflationary expectations in the complex conditions of the Iranian economy, using seasonal data from 2016 to 2025. Since numerous economic, political, social, and cultural factors can be effective in the formation of inflationary expectations, the fuzzy regression method has been used in the present study to estimate the model. Because this method has a high ability to examine correlation in conditions of uncertainty and uncertainty. The findings of this study showed that exchange rate uncertainty has a positive and strong effect on inflation expectations, such that the role of this factor in the formation of inflation expectations in the Iranian economy is 26 percent. Exchange rate uncertainty, along with the intensification of cost and psychological pressures, is considered one of the most important drivers of inflationary expectations instability in the Iranian economy. On the other hand, controlling inflationary expectations is very crucial for establishing stability in the country's economy. Given the importance of this issue, the aim of the present study is to investigate the effect of exchange rate uncertainty on inflationary expectations in the complex conditions of the Iranian economy, using seasonal data from 2016 to 2025. Since numerous economic, political, social, and cultural factors can be effective in the formation of inflationary expectations, the fuzzy regression method has been used in the present study to estimate the model. Because this method has a high ability to examine correlation in conditions of uncertainty and uncertainty. The findings of this study showed that exchange rate uncertainty has a positive and strong effect on inflation expectations, such that the role of this factor in the formation of inflation expectations in the Iranian economy is 26 percent

Keywords

Subjects
  • Receive Date 25 August 2025
  • Revise Date 25 November 2025
  • Accept Date 14 December 2025
  • First Publish Date 30 June 2026
  • Publish Date 30 June 2026