Will Iran's economy collapse?
The best remedy for Iran to solve its economic crisis is greater transparency and a focus on technocratic remedies.
Turbulent developments in the past few months on the foreign exchange and gold markets in Iran and the government’s failure to manage runaway prices has compelled some economists to start using the term “bubble economy.”
The interrelationship among various markets within the country’s economy was explained in a June 14 Al-Monitor piece. In this article, however, we will focus on the root causes and complexities of behaviors by economic players. Regardless of whether these acts are driven by economic, psychological or political factors, they are damaging to the economy as a whole and compound the government's challenges in managing the economy. At the same time, it is clear that a continuation of the current conditions will increase the likelihood of an economic crisis with unprecedented social and political consequences. The current wave of strikes and demonstrations by traders and other economic actors is an example of how the problem will be amplified if the authorities do not develop proper responses.
