Investigating the effects of financial development, economic stability and efficiency of cooperative contracts of banks during recession and prosperity

Subject Areas : Financial Knowledge of Securities Analysis

Mohsen mirzasaf ¹ , Marjan Damankeshideh ² , manizheh hadinejad ³ , alireza daghighi ⁴ , mohammadreza mirzaeinejad ⁵

1 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
2 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran, Corresponding Author
3 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran
4 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran.
5 - Department of Economics, Central Tehran Branch, Islamic Azad University, Tehran, Iran.

Received: 2022-08-25 Accepted : 2022-09-28 Published : 2023-05-22

Keywords: cooperative contracts of banks, Financial Development, economic stability, Markov switching regime change,

Abstract :

Financial development and stability and their relationship with economic growth are important and influential issues on economic growth. Therefore, economic experts have investigated this issue in many researches by applying various conditions. The purpose of this research is to investigate the effects of financial development, economic stability and efficiency of government cooperative contracts during recession and prosperity, which done by applying the Markov switching regime change approach based on the annual data of Iran's economy during the period of 2016-2018. The results of the model estimation show that the variables of financial and oil crises, economic and financial risk, inflation in both periods of prosperity and recession have a negative effect on the efficiency of cooperative contracts. The results show the probability of transition from one regime to another regime and the duration of the regime, if Iran's economy is in a recession at time t, it will remain in the same state despite economic and financial risks and financial and oil crises. Also, there is a 0.80 probability that Iran's economy will return to the state of recession due to other factors. The amount of exposure of Iran's economy to the period of stagnation in the current research is 21 periods against 9 periods of prosperity.