The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR)
One important aspect of financial development in oil-exporting countries is how to allocate oil income during periods of oil price fluctuations. Financial development in these countries affects their current accounts in two ways: directly through the impact on savings and investment and indirectly t...
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| Format: | Article |
| Language: | fas |
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Allameh Tabataba'i University Press
2019-12-01
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| Series: | فصلنامه پژوهشهای اقتصادی ایران |
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| Online Access: | https://ijer.atu.ac.ir/article_11687_e458564880b8d027673f2bde4b47031f.pdf |
| _version_ | 1827393245913546752 |
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| author | Mahdie Rezagholizade Malihe keyvanpor |
| author_facet | Mahdie Rezagholizade Malihe keyvanpor |
| author_sort | Mahdie Rezagholizade |
| collection | DOAJ |
| description | One important aspect of financial development in oil-exporting countries is how to allocate oil income during periods of oil price fluctuations. Financial development in these countries affects their current accounts in two ways: directly through the impact on savings and investment and indirectly through the impact on the relationship of oil prices and current account. Considering the importance of this issue, this study investigates the role of financial development in the relationship between oil price and current account using a nonlinear Smooth Transition Regression model (STR) during the period of 1978-2016 in Iran. Based on the relevant tests, it is concluded that there is a nonlinear relationship between the current account and world oil price. Financial development is chosen as the best transition variable and the nonlinear Smooth Transition Regression model with a two-regime logistic transition function (LSTR1) has been chosen as the best model for this relationship. The results of estimation show that the oil price appearing in the form of a two-regime structure with a threshold level (1.5386) in the first regime (when financial development is less than it’s threshold value (1.5386)) has a positive and significant effect on Iran’s current account; The intensity of this positive effect increases by crossing the threshold level entering to the second regime (when financial development is higher than its threshold value (1.5386). |
| first_indexed | 2024-03-08T17:45:30Z |
| format | Article |
| id | doaj.art-fc952668195c4923aad04a43869d914c |
| institution | Directory Open Access Journal |
| issn | 1726-0728 2476-6445 |
| language | fas |
| last_indexed | 2024-03-08T17:45:30Z |
| publishDate | 2019-12-01 |
| publisher | Allameh Tabataba'i University Press |
| record_format | Article |
| series | فصلنامه پژوهشهای اقتصادی ایران |
| spelling | doaj.art-fc952668195c4923aad04a43869d914c2024-01-02T10:29:37ZfasAllameh Tabataba'i University Pressفصلنامه پژوهشهای اقتصادی ایران1726-07282476-64452019-12-0124819113410.22054/ijer.2019.1168711687The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR)Mahdie Rezagholizade0Malihe keyvanpor1Assistant Professor of Economics, Department of Economics, University of Mazandaran, Mazandaran, Iran,M.A. of Economics, University of Mazandaran, Mazandaran, Iran.One important aspect of financial development in oil-exporting countries is how to allocate oil income during periods of oil price fluctuations. Financial development in these countries affects their current accounts in two ways: directly through the impact on savings and investment and indirectly through the impact on the relationship of oil prices and current account. Considering the importance of this issue, this study investigates the role of financial development in the relationship between oil price and current account using a nonlinear Smooth Transition Regression model (STR) during the period of 1978-2016 in Iran. Based on the relevant tests, it is concluded that there is a nonlinear relationship between the current account and world oil price. Financial development is chosen as the best transition variable and the nonlinear Smooth Transition Regression model with a two-regime logistic transition function (LSTR1) has been chosen as the best model for this relationship. The results of estimation show that the oil price appearing in the form of a two-regime structure with a threshold level (1.5386) in the first regime (when financial development is less than it’s threshold value (1.5386)) has a positive and significant effect on Iran’s current account; The intensity of this positive effect increases by crossing the threshold level entering to the second regime (when financial development is higher than its threshold value (1.5386).https://ijer.atu.ac.ir/article_11687_e458564880b8d027673f2bde4b47031f.pdffinancial developmentoil price fluctuationscurrent accountirannonlinear smooth transition regression model (str) |
| spellingShingle | Mahdie Rezagholizade Malihe keyvanpor The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) فصلنامه پژوهشهای اقتصادی ایران financial development oil price fluctuations current account iran nonlinear smooth transition regression model (str) |
| title | The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) |
| title_full | The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) |
| title_fullStr | The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) |
| title_full_unstemmed | The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) |
| title_short | The Role of Financial Development in the Relationship of Oil Price Fluctuations and Current Account in Iran: Nonlinear Smooth Transition Regression Model (STR) |
| title_sort | role of financial development in the relationship of oil price fluctuations and current account in iran nonlinear smooth transition regression model str |
| topic | financial development oil price fluctuations current account iran nonlinear smooth transition regression model (str) |
| url | https://ijer.atu.ac.ir/article_11687_e458564880b8d027673f2bde4b47031f.pdf |
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