Razi University

Inflation in Iran's economy over recent decades has become one of the most persistent and complex macroeconomic challenges—a challenge that has not only disrupted economic stability but has also subjected household decision-making, firm behavior, and policy formulation to serious uncertainty. Under such circumstances, examining the role and effectiveness of monetary policy tools in controlling inflation becomes particularly important. This topic was chosen because, despite the widespread use of instruments such as the discount rate, the legal reserve requirement ratio, and open market operations, inflation behavior in Iran remains unpredictable, time-varying, and dependent on structural shocks. On the other hand, many domestic studies have examined the effect of monetary policy as fixed and linear, while empirical evidence suggests that the effectiveness of monetary policy changes across different inflationary periods and may even exhibit reverse behavior at high inflation levels. This very issue highlights the necessity of employing more advanced models such as TVP?SVAR and quantile regression to accurately analyze the time dynamics and heterogeneity of these effects. Therefore, this research has been conducted with the aim of investigating the time-varying effects of monetary policy instruments on inflation and analyzing the heterogeneity of these effects across different inflation levels—in order to determine during which periods each instrument has been effective, during which periods its impact has weakened, and how the combination of instruments can be used for sustainable inflation control.