High and volatile inflation rates constitute a significant economic challenge for Iran, particularly in recent years. Diverse perspectives exist among experts regarding the underlying factors and appropriate solutions. This paper presents a unified framework for understanding the causes of inflation in the Iranian economy and outlines corresponding policy recommendations. This framework categorizes inflationary drivers into two distinct groups: long-term and short-term factors. The primary long-term driver, contributing to Iran's persistently higher inflation compared to other nations, is identified as excessive liquidity growth exceeding production growth. This assertion is supported by empirical evidence. Notably, liquidity growth itself is an endogenous outcome of income-expenditure imbalances within the Iranian economy. This disparity manifests as insufficient expenditure growth relative to national income growth at the macroeconomic level. Conversely, short-term inflation fluctuations (around the long-term trend) are primarily influenced by the anchor of inflation expectations (the unofficial exchange rate in the Iranian economy) and the monetary policymaker's response to these fluctuations. Consequently, short-term policy interventions should prioritize minimizing exchange rate volatility around the long-term real exchange rate trend, implementing robust rial governance, and strengthening the central bank's monetary policy framework. Long-term effectiveness necessitates measures such as controlling both the quantity and quality of liquidity, reforming the banking system and addressing unsound banking practices, restructuring the budget to improve the operational balance, reducing excess liquidity, and redefining the nominal anchor.