Explaining the rotational relationship between strategic goods and Islamic financial markets in Iran (Arch regime change approach - Markov switching)
Explaining the cyclical relationship between strategic goods and Islamic financial markets in Iran (Arch-Markov Switching Regime Change Approach
Subject Areas : Financial Knowledge of Securities Analysis
فریده بختیاریان 1 , fatemeh zandi 2 * , Abdollah Davani 3 , Fatemeh Sarraf 4
1 - PhD student in economics, South Tehran Branch, Islamic Azad University, Tehran, Iran
2 - Assistant Professor in the Department of Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran (Corresponding author)
3 - Assistant Professor, Department of Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran
4 - Associate Professor, Department of Economics, South Tehran Branch, Islamic Azad University, Tehran, Iran
Keywords: Strategic goods, financial markets, recession and boom, ,
Abstract :
In this study, we seek to explain the cyclical relationship between strategic goods and Islamic financial markets in Iran in recession and boom regimes. For this purpose, the effect of study variables during the period of 1370 to 1400 is investigated by using the rotation model and the Arch-Markov switching regime. Based on the results of the model estimation, with the increase of currency fluctuations and price fluctuations in the gold market and negative monetary shocks, the facilities granted by banks in the form of Islamic contracts to the private sector will decrease. In general, fluctuations and negative shocks increase the risk of investment projects and lead to a decrease in investment; Especially in an inflationary situation where the value of money decreases, the nominal interest rates for savings and reserves are low. In this case, investing in currency, real estate, gold, etc., provides a higher interest rate compared to keeping reserves in the banking system. This causes a decrease in the desire to save and reduces the funds available for investment in the banking system, and as a result, the facilities granted by banks in the form of Islamic contracts to the private sector are reduced.
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