Asymmetric Effects of Exchange Rate Uncertainties on Economic Growth and Social Welfare in Developing Islamic Countries: Application of Recurrent Neural Network Model and PARDL Model
Subject Areas : Journal of Iranian Social Development Studies
mohsen sAMI
1
,
بهروز صادقی عمروآبادی
2
*
,
forozan baktash
3
1 - PhD Student in Economic Sciences – Islamic Economics, Dehaqan Branch, Islamic Azad University, Dehaqan, Iran
2 - Assistant Professor, Department of Economics, Shahid Chamran University, Ahvaz, Iran
3 - Assistant Professor, Department of Economics, Dehaqan Branch, Islamic Azad University, Dehaqan, Iran
Keywords: exchange rate uncertainty, social welfare, economic growth, developing Islamic countries, recurrent neural network model, PNARDL model,
Abstract :
The discussion regarding the impact of exchange rate uncertainties on social development regarding the economy of developing countries has been a fringe discussion without clear conclusions. Also, the uncertain effects of the exchange rate on economic growth is one of the economic topics that still faces a research gap. Accordingly, the purpose of this research is to investigate the asymmetric effects of exchange rate uncertainties on social welfare and economic growth in developing Islamic countries. In this study, the annual data of 40 selected Islamic countries for the period of 2012-2023 have been used. In order to calculate the indices of exchange rate uncertainties, the recurrent neural network model was used, and to estimate the relationship between the research variables, the autoregression method with non-linear distribution breaks with the panel data approach (PNARDL) was used. The results of the research showed that the response of social welfare and economic growth variables to positive uncertainties (uncertainties caused by the strengthening of the exchange rate) and negative (uncertainties caused by the weakening of the exchange rate) is asymmetric, so that the uncertainty resulting from the strengthening of the exchange rate has a greater negative effect. due to uncertainty resulting from the weakening of the exchange rate.
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