A Note on Early Warning Systems for Monitoring the In ation of Iran

To check the nancial stability, it is important to alarm the possibility of future potential nancial crisis. In the literature, the early warning system (EWS) is de- signed to warn the occurrence of a nancial crisis before it happens. This tool gives strengthens to managers to make ecient policy in real economic activities. Hy- perin ation, as a nancial crisis, is an uncommon bad phenomenon in every economy. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, often the US Dollar. Hence, design- ing a EWS for detecting hyperin ation is valuable task. In the current paper, Iran monthly in ation is modeled by a rst.