Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach
This paper uses the non-linear auto-regressive distributed lags (NARDL) model to examine the short- and long -run effects of the negative and positive shocks of the shadow economy on financial development in Iran over the period 1974 - 2015. For this purpose, the ratio of liquidity to gross domestic...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | fas |
| Published: |
Tarbiat Modares University
2020-03-01
|
| Series: | پژوهشهای اقتصادی |
| Subjects: | |
| Online Access: | http://ecor.modares.ac.ir/article-18-26146-en.pdf |
| _version_ | 1827924912450306048 |
|---|---|
| author | kiumars shahbazi khadijeh Hasanzadeh Vahid Khoshkhabar |
| author_facet | kiumars shahbazi khadijeh Hasanzadeh Vahid Khoshkhabar |
| author_sort | kiumars shahbazi |
| collection | DOAJ |
| description | This paper uses the non-linear auto-regressive distributed lags (NARDL) model to examine the short- and long -run effects of the negative and positive shocks of the shadow economy on financial development in Iran over the period 1974 - 2015. For this purpose, the ratio of liquidity to gross domestic product is used as an indicator of financial development. The shadow economy includes all market-based production activities that are deliberately hidden from government officials due to the escape or avoidance of payments, such as taxes and social security contributions. In this study, the MIMIC (multiple indicators and multiple causes) calculations by Piraee and Rajaee (2015) are used for estimating the shadow economy. The results show that the effects of positive and negative shocks of shadow economy on financial development are asymmetric in the short- and long-run. This asymmetry means that in the short- and long-run, the negative shock to shadow economy is more effective than its positive shock. Therefore, in order to maintain the current level of financial development, the government can monitor size of shadow economy through strict control of illegal activities in the short-run, identify the illegal activities, and reduce them in the long run. |
| first_indexed | 2024-03-13T05:18:38Z |
| format | Article |
| id | doaj.art-ddd0ab86c2384d51ae2f341e3d38de18 |
| institution | Directory Open Access Journal |
| issn | 1735-6768 2980-7832 |
| language | fas |
| last_indexed | 2024-03-13T05:18:38Z |
| publishDate | 2020-03-01 |
| publisher | Tarbiat Modares University |
| record_format | Article |
| series | پژوهشهای اقتصادی |
| spelling | doaj.art-ddd0ab86c2384d51ae2f341e3d38de182023-06-15T20:24:32ZfasTarbiat Modares Universityپژوهشهای اقتصادی1735-67682980-78322020-03-01201204185Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approachkiumars shahbazi0khadijeh Hasanzadeh1Vahid Khoshkhabar2 Professor of Economics, Urmia University Ph.D. Candidate in Economics, Urmia University B.A. in Economics, Urmia University This paper uses the non-linear auto-regressive distributed lags (NARDL) model to examine the short- and long -run effects of the negative and positive shocks of the shadow economy on financial development in Iran over the period 1974 - 2015. For this purpose, the ratio of liquidity to gross domestic product is used as an indicator of financial development. The shadow economy includes all market-based production activities that are deliberately hidden from government officials due to the escape or avoidance of payments, such as taxes and social security contributions. In this study, the MIMIC (multiple indicators and multiple causes) calculations by Piraee and Rajaee (2015) are used for estimating the shadow economy. The results show that the effects of positive and negative shocks of shadow economy on financial development are asymmetric in the short- and long-run. This asymmetry means that in the short- and long-run, the negative shock to shadow economy is more effective than its positive shock. Therefore, in order to maintain the current level of financial development, the government can monitor size of shadow economy through strict control of illegal activities in the short-run, identify the illegal activities, and reduce them in the long run.http://ecor.modares.ac.ir/article-18-26146-en.pdfshadow economyasymmetric impactnardl |
| spellingShingle | kiumars shahbazi khadijeh Hasanzadeh Vahid Khoshkhabar Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach پژوهشهای اقتصادی shadow economy asymmetric impact nardl |
| title | Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach |
| title_full | Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach |
| title_fullStr | Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach |
| title_full_unstemmed | Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach |
| title_short | Asymmetric Effects of Shadow Economy on Financial Development in Iran: NARDL Approach |
| title_sort | asymmetric effects of shadow economy on financial development in iran nardl approach |
| topic | shadow economy asymmetric impact nardl |
| url | http://ecor.modares.ac.ir/article-18-26146-en.pdf |
| work_keys_str_mv | AT kiumarsshahbazi asymmetriceffectsofshadoweconomyonfinancialdevelopmentinirannardlapproach AT khadijehhasanzadeh asymmetriceffectsofshadoweconomyonfinancialdevelopmentinirannardlapproach AT vahidkhoshkhabar asymmetriceffectsofshadoweconomyonfinancialdevelopmentinirannardlapproach |