Mohammad Ghaffaryfard , Seyed Taher Mosavi
The purpose of this study was to investigate the effects of current and
development expenditures as instruments of fiscal policy and exchange rate, real
money supply and GDP on macroeconomic variables such as inflation in the
Afghan economy, using annual data, during the period (2002-2011). Is. In this
regard, the econometric model of vector regression was used. The results show
that in the short run, real current expenditures, real liquidity, and exchange rates
increase inflation in Afghanistan. While the increase in real development
expenditures and GDP reduces inflation are also statistically significant; But in
the long run, it is only the increase in GDP that will reduce inflation in the
Afghan economy. Considering the results obtained, in the short run, in order to
control inflation, the share of construction expenditures in the government
budget should be increased, and in the long run, discipline in government
expenditures is the most effective policy in controlling inflation.